Workers' Comp

Is Workers Compensation the Same as State Disability?
No. Workers' compensation is only for injury or illnesses that occur due to employment. State disability is for injuries or illnesses that are not work-related. The Employment Development Department (EDD) handles these. State Disability Insurance (SDI) is automatically deducted from the employee's paycheck.

Is Every Injury a Reportable Work Comp Claim?
No. Certain injuries are treated as “first aid” claims and handled outside of the workers compensation process. Contact us for additional information on “first aid” injuries.

What is an Early Return to Work Program?
It is the process of bringing an injured employee who has not fully recovered back to work as early as possible. The focus is on functional recovery, not on just the relief of symptoms. It is critical in decreasing lost workdays, and avoiding unnecessary disability syndromes.

What is an Experience Modification Factor?
Experience rating assesses whether your company's claims experience is greater or less than average by comparing your company's payroll and claims history with other businesses in the same industry. In California, this statistical comparison is made by the Workers' Compensation Insurance Rating Bureau, which uses your recent policy history to compute your business's experience modification. The "ex-mod" is a percentage factor that modifies your current workers' comp premium. If your claims are less than the average, your premium will be adjusted downward. Conversely, if your business has had higher losses than the rest of your industry, your premium will be higher. Some states have a similar process, while others belong to NCCI for computing these “ex-mods”. There is a minimum premium level necessary to qualify, and the plan is mandatory for all qualified businesses. For California in 2006, that premium level is $28,400 over a three-year (or shorter) period. The premium level is based on the pure premium rates.

How Do I Handle Independent Contractors (ICs) Without Workers Compensation Insurance?
Compensation laws provide that the hiring employer may be responsible for compensation of the employees of uninsured ICs. In determining compensation premiums, you will be charged premium for coverage in connection with these ICs unless you can provide satisfactory evidence of such insurance. For your protection, you should obtain certificates of insurance from all ICs working on your behalf.

Can I Exclude My Executive Officers/Partners/Members from Coverage?
If you are a closed corporation (all the company’s stock is owned by the Executive Officers) or partnership, you can exclude coverage for these individuals. In those instances, where you cannot exclude the officers/partners/members, each state allows you to cap the compensation for these individuals in the premium computation. In California for 2006, the maximum cap is $81,700 of remuneration and the minimum amount is $32,500.

What is Included in Remuneration?
Remuneration includes an employee’s wages, salary, cash payments to subcontractors, bonuses, commissions, vacation, holiday and sick pay, straight time for overtime hours, market value of lodging provided, market value of gifts and all other substitutes for money.



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