| Prompt Insurance Agency, LLC |
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| Questions? Call (949) 351-8767 |
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California workers compensation system was adopted early in the 20th century to address the needs of employees who are injured on the job. It is the oldest social insurance program - and is referred to as a no-fault system. This means that injured employees do not need to prove that their injury was someone else's fault in order to receive workers compensation benefits for injuries sustained at work. The workers' compensation system is based upon a trade-off between employers and employees. Employees are, by statute, supposed to promptly receive limited workers' compensation benefits for on-the-job injuries. In return, these limited workers' compensation payments are the sole remedy for injured employees against their employer. This no-fault structure is designed eliminate litigation over whether employers were negligent in causing workers' injuries. Any litigation that occurs is now over other issues, such as whether the injury was sustained on-the-job or how much in benefits an injured worker is entitled to receive. There are three basic parts to the workers' compensation system:
The benefit delivery system, contrary to common belief, is not administered by the state of California. Workers comp benefits are managed primarily by private insurance companies authorized (by the state) to transact workers compensation activity. In some cases, if the employer is large and financially secure enough, they may be permitted to "self insure" their workers compensation liability. The benefit financing system determines how employers will pay for their workers compensation liability coverage. As noted above, large stable employers and most government agencies may self-insure. To self-insure workers compensation, however, the organization must post security and obtain a certificate ("permit") from the Department of Industrial Relations. The vast majority of California businesses cannot self-insure and must obtain their workers compensation coverage from any of approximately 300 private insurance companies licensed by the Department of Insurance to transact workers compensation insurance. The 3rd and final option allows employers to purchase insurance directly from the State Compensation Insurance Fund. This is a state operated entity that is chartered to transact workers compensation insurance on a non-profit basis. Although this might appear to be an attractive alternative, the agency also functions as the "assigned risk" pool - for those business classifications carrying extremely high loss ratios. Workers compensation insurance rates have become a highly charged emotional issue since the late 1990s. There are many categories and stratifications of rating - so it is important that your workers comp provider be knowledgeable in how to most cost effectively employ a viable workers compensation coverage strategy. Prompt Insurance Agency follows a continuing education program of research and analysis to assure that they provide the best workers comp alternative for their business insurance clients. |
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