Among the many items on an entrepreneur''s "to-do" list before creating a corporation in California, obtaining workers'' compensation insurance is not only important, but legally required.
While many states differ in their workers'' compensation laws, all 50 states do require it in some form or fashion, according to Jason Beahm at FindLaw.com. California requires all companies with at least one employee to carry workers compensation (roofers who are self-employed with no employees must even carry a policy for themselves). However, other states have exemptions based on number of employees.
Beahm recommends that business owners carefully look at workers'' classifications to assure all employees are being charged at the correct rate. Office workers, for example, will have a much lower premium charged than workers in more dangerous occupations, such as construction.
Entrepreneurs should also keep in mind that since workers'' compensation pays out claims regardless of fault, implementing a comprehensive safety program with training and education can help reduce claims, and, thereby, keep insurance costs at a minimum.
In California, not carrying workers compensation is a crime and business owners failing to carry adequate coverage for all employees face imprisonment and fines of up to $100,000.
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Posted: Sep 10th, 2010