Workers' Compensation Insurance in California

Every California employer except the state must carry workers' compensation insurance or hold a certificate to self-insure, even with one employee. Anyone working for you is presumed to be an employee. Licensed contractors keep a certificate of coverage or a no-employee exemption on file with the CSLB, and from January 1, 2028 almost every contractor needs coverage.

Menlo can quote this coverage in California through 8 insurance markets.

Menlo's California figures

California rules

• Every employer except the state must secure the payment of compensation, with insurance from a licensed carrier or a certificate of consent to self-insure.

  Source: California Legislative Information, Labor Code section 3700 (read September 23, 2026)

• Coverage is required even with only one employee.

  Source: California Department of Industrial Relations, Division of Workers' Compensation, Employer information (read September 23, 2026)

• Anyone rendering service for you, other than an independent contractor or a person the law expressly excludes, is presumed to be an employee.

  Source: California Legislative Information, Labor Code section 3357 (read September 23, 2026)

• Licensed contractors must keep a certificate of workers' comp insurance, or a signed no-employee exemption, on file with the CSLB. C-8, C-20, C-22, C-39 and C-61/D-49 license holders must carry coverage whether or not they have employees.

  Source: Contractors State License Board, Workers' Compensation Requirements (read September 23, 2026)

• From January 1, 2028, every contractor needs a certificate of coverage on file; only a joint venture with no employees may file the no-employee statement instead (SB 1455, Chapter 485, Statutes of 2024).

  Source: California Legislative Information, SB 1455 (Ashby), Contractors: licensing (read September 23, 2026)

• An uninsured employer can be served a stop order barring all employee labor until coverage is in place.

  Source: California Legislative Information, Labor Code section 3710.1 (read September 23, 2026)

• With the stop order comes a penalty of $1,500 per employee on the payroll at the time.

  Source: California Legislative Information, Labor Code section 3722 (read September 23, 2026)

• Knowingly failing to secure coverage is a misdemeanor punishable by up to a year in county jail, a fine of up to double the unpaid premium (at least $10,000), or both.

  Source: California Legislative Information, Labor Code section 3700.5 (read September 23, 2026)

• For policies starting on or after September 1, 2026, the Insurance Commissioner adopted an average advisory pure premium rate of $1.65 per $100 of payroll, up 6.6%. Insurers file their own rates and are not bound by it.

  Source: California Department of Insurance, Commissioner Lara takes action to maintain stable workers' compensation market amid rising costs (July 10, 2026) (read September 27, 2026)

Related

• Workers' Compensation Insurance
• General Liability Insurance in California
• Workers' Comp Insurance Cost in California (2026)
• California Workers' Comp Class Codes: How WCIRB Classifications Work (2026)
• Workers' Comp Exemption in California: Who Is Exempt, the CSLB Form, and the 2028 Contractor Rule
• Workers Comp Ghost Policy: What It Is, What It Costs, and the Traps