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WC Insurance and the “Exclusive Remedy Rule”

WC Insurance and the “Exclusive Remedy Rule”

All employers must secure payment of compensation for workers’ compensation liability under California Labor Code § 3700.

An employer cannot opt out of workers’ compensation liability insurance in California; rather it is required by Labor Code § 3700 et seq. Failure to insure is a crime and also exposes the employer to civil liability. There are three ways a private employer can secure workers’ compensation coverage. According to Labor Code § 3700 an employer may (1) Obtain insurance from one or more insurers authorized to write compensation insurance in the state; (2) Self- insure; or (3) Join with other employers to self-insure the group.

Obtaining insurance from an insurer authorized to write compensation insurance seems straight forward—but what about self insuring or joining a “self-insure group?” Under Labor Code § 3700(b) larger employers may choose to self-insure rather than purchase insurance.  To become self insured, the employer must apply to the Director of Industrial Relations for certificate of self-insurance; this must be done annually. Generally, the employer must post a bond or deposit with the State to cover the anticipated future liability for compensation benefit payments to be made.  Labor Code § 3701(a).

All employers are required to secure a means of payment of compensation for workers’ compensation liability. There is no full-time employee requirement, nor any tenure required to qualify as a covered employee.  One exception is for emotional stress or psyche injury claims, which usually require a six month tenure of employment before any such claim can be filed. In addition, California workers’ compensation laws will govern virtually every injury sustained by someone hired in California, or who regularly works in California, even if the injury occurred out-of-state.

Workers’ compensation benefits remain the exclusive remedy for those injured or killed on the job.  Employees cannot sue their employers for damages in civil court for such injuries.  At the WCAB, there is no recovery for “pain and suffering,” “loss of consortium,” or punitive damages.

However, this exclusivity is waived, and the employee can sue in court for damages, if the injury results from certain types of intentional or egregious conduct, or when the employer does not have workers’ compensation coverage or permissible self-insurance.

The litigation of these matters can become very complex.  Having the right expert workers’ compensation defense firm ensures an efficient and cost-effective resolution.

Need help with a liability matter or subrogation recovery? Reach out to RTGR Law’s Managing Partner, Tom Richard.


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