Liberty Company Insurance Brokers Blog

Workers’ compensation insurance is a type of business insurance Los Angeles business owners often find problematic. Workers’ compensation insurance is mandatory in California for employers with one or more workers. The insurance is designed to compensate workers who suffer work-related injury or illness and employers who carry this coverage are granted immunity from civil lawsuits filed by employees over workplace injuries.

Workers’ compensation policies generally require the employer to forecast the annual payroll of the business and to pay premiums in advance based on the payroll estimate. The employer’s accounts are audited at the end of the year to ensure that workers’ compensation regulations have not been breached.  

Many business owners look for ways of minimizing the cost of mandatory workers’ compensation insurance. Emphasizing workplace safety is one of the best ways of reducing claims that may affect workers’ compensation rating. Workers’ compensation insurance costs may also be reduced if an employer helps injured employees to return to work through modified work programs.

As many employers find that prepayment of the premiums for this type of insurance has a negative effect on business cash flow, insurers have introduced pay as you go workers’ compensation business insurance. Los Angeles employers who are eligible for pay as you go workers’ compensation insurance are not required to estimate future payroll or make advance payments and their books are not subjected to annual audits. The alternative pay as you go policies are popular with small business owners who are trying to make the best use of their cash flow to develop and grow their enterprises.
 

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