Any contractor in California that hires an employee must have Workers’ Compensation insurance. The State of California will take disciplinary action or impose severe penalties against any contractor that does not have a proper Workers’ Comp policy in place. Not only does the State regulate this coverage but many project managers will request proof of workers’ comp insurance before allowing a contractor on the job.
Cost for Contractor Workers’ Compensation in California
The cost for a contractor Workers’ Comp policy can vary greatly based on the location, payroll amount, classification of workers, and the company’s prior work-related injury history. Policy premium rates range from 3% to 25% of the total payroll amount.
| Classification | Annual Payroll Example | Est. Monthly Comp Premium* |
|---|---|---|
| General (B) | $25,000 | $189-$530 |
| Concrete (C08) | $25,000 | $203-$291 |
| Electrical (C10) | $25,000 | $80-$169 |
| Drywall (C13) | $25,000 | $137-$266 |
| Landscaper (C27) | $25,000 | $152-$284 |
| Painter (C33) | $25,000 | $163-$336 |
*Prices shown are based on several factors including, but not limited to, classification, payroll, experience modification and location. Rates do not constitute an offer of coverage and are subject to change at any time. Rates may fall outside average ranges shown here due to exceptional risk factors.
What does a Workers’ Compensation policy cover?
Should an employee get injured, become sick, or die because of work, the workers comp policy will provide benefits to the employee or their family. Possible benefits include medical care, temporary or permanent disability benefits, partial wage replacement, and death benefits.
In addition to the employee, the contractor is covered by a Workers’ Comp policy. An employee cannot file a lawsuit against a contractor if they received compensation through the Workers’ Comp policy. However, a lawsuit can be filed against the employer, if the employer intentionally injures the employee or if the work performed was outside the scope of the worker’s assignment.
Filing with the California Contractors State License Board
Each contractor is required to file a Certificate of Insurance verifying coverage to the Contractor State License Board. If a contractor does not have any employees, they must file an exemption to the CSLB which can be done here: CSLB Workers Comp Exemption Online Submission.
The Workers’ Comp filing can and should be completed by your insurance agent or provider. All filings performed by our organization and our partners are sent electronically to the CSLB. You can simply verify your workers’ compensation filing on the CSLB website’s license check.
Payroll and Workers’ Compensation Service Advantage
A contractor's business payroll is in constant fluctuation due to seasonality, job availability, and the ebb and flow of a single project. With Workers’ Compensation rates directly related to employee payroll, it is at the benefit of the contractor to have the payroll service and Workers’ Compensation handled by the same provider. This will ensure the business owner doesn’t overpay for coverage or risk a substantial bill during a year-end audit.
CCIS has partnered with an established payroll company to provide both Workers’ Compensation coverage and payroll services under our roof. Contractors will have the best-in-class payroll service and insurance agents at their service for their required insurance needs. The Premium Payroll Integration Program** eliminates up-front deposits, offers a pay-as-you-go payment option, and eliminates the need to write checks.
| Traditional Comp Carriers | CCIS In-House Payroll Program |
|---|---|
 25%-100% deposit required |
 No deposit required* |
| Premium based on estimated annual payroll |
Premium based on actual payroll |
| High risk of additional premium due |
Less risk of over or underpayment |
| Mailing checks and risking late payment |
No writing checks |
Inside our Workers’ Comp Ghost Policy
For one-person operations, independent contractors, and paper GCs in California
You’re self-employed with no workers or an independent contractor, so Workers’ Compensation is not required in most cases. However, your customers want proof of coverage during the bidding process so you can win the project. Or you’re a general contractor managing the construction work with a high subcontractor exposure and no payroll. You must also provide proof of Workers' Comp to land a project.
Our Workers’ Comp Ghost Policy is designed to fit your needs and show proof of coverage. While the policy doesn’t provide coverage or any benefits, it enables you to meet contractual obligations and land more jobs.
The premium for a Workers’ Compensation Ghost policy is based on payroll. There is no payroll for businesses without employees, so a Ghost policy is often less expensive than standard Workers' Compensation insurance. Before you renew your coverage, the insurance company will perform an audit to check that you still have no employees. Premium adjustments will be made if you’ve hired anyone during the year.
For California Paper General Contractors
With CCIS’ program, general contractors with a subcontractor exposure over 50% and up to 100% can also obtain a Workers’ Compensation policy.
Call us at (800) 432-2641 to see if you’re eligible for our Workers’ Comp Ghost Policy and GC Program and for a quote.
*Mandatory state assessment fees may be required.
**This information covers only the offering of ADP’s Premium Payroll Integration Program for Workers’ Compensation, a payroll enhancement feature of the payroll processing services, and does not involve the offer or sale of any insurance product. All insurance products will be offered and sold only through the licensed agents of Automatic Data Processing Insurance Agency Inc. or its licensed insurance partners. Certain services may not be available in all states. Clients must be using ADP’s tax filing service to take advantage of ADP’s Premium Payroll Integration Program is the registered trademark of ADP, Inc.
