Beginning January 1, 2023, all concrete, HVAC, asbestos abatement, and tree service contractors conducting business in California will be required to obtain workers compensation insurance, whether they have employees or not. This requirement was signed into law by Governor Newsom in September 2022. The new law will also require all contractors, regardless of whether they have employees, to have workers compensation insurance by January 2026.
If contractors do not have workers’ compensation insurance by July 1, 2023, the licensee risks having the license suspended or classification(s) removed. Any work performed under license suspension is illegal and considered unlicensed activity. An unlicensed contractor can face disciplinary action and hefty fines.
Contractors need to submit a valid and active certificate of insurance to the Contractors State License Board (CSLB). The CSLB has a guide to assist with submission that can be found on their website. Insurers, duly licensed to write worker’s compensation insurance in California, may issue and file certificates online.
The CSLB will return any certificate that does not comply with their requirements. Before submitting insurance certificates manually, check for the following common mistakes:
- Entering the incorrect Business name.
- Entering the incorrect Insurance Company name.
- Entering the incorrect policy number.
- Not listing the Contractors State License Board as the Certificate Holder.
- Entering an Invalid Signature.
Some additional things to double check include:
- Ensuring the Contractor’s license number is listed.
- Making sure the effective date and expiration date of the policy is listed.
- Having an authorized representative of the insurance company’s signature on the certificate.
Workers’ compensation insurance aids employees that get injured on the job or sick due to work. The insurance provides affected employees with medical care, temporary or permanent disability benefits, supplemental job displacement benefits, a return-to-work supplement, death benefits, plus other basic benefits.
Contractors can visit the California Department of Insurance to obtain a list of Licensed Workers’ Compensation Companies. The agency also has many answers to common questions employers may have regarding insurance, such as where to obtain insurance, self-insurance requirements, insurance and premium costs, and what to do if your employee gets hurt or sick on the job.
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