What an Employer Can Do If Uninsured And Faced With a Claim?

Every employer in the state of California is required to carry workers’ compensation insurance by law. What this means is that regardless of how many employees you have, even if you have one, you need to cover the work comp insurance.

In a situation where you are uninsured and your employee gets injured on the job, you will be in a lot more trouble and have to pay a lot more than the value of workers’ compensation insurance.

Fact – without the insurance, an employer may face criminal charges and even spend a year in jail.

Here is what an employer is faced with, and what he/she can do if uninsured and faced with a claim.

Expensive Litigation

If you fail as an employer to carry the workers’ compensation insurance, you will face potential:

• Criminal prosecutions
• Personal fines (first fine is up to $10,000, second can go up to $50,000)

Under California Labor Code, if the workers’ compensation appeals board finds out that you are illegally uninsured, you will face fines for up to $10,000 per employee if the injury is compensable, and up to $2,000 per employee is the injury is not compensable. The maximum you can be charged for a compensable injury is $100,000.

Seek Legal Help

If one of your employees seeks workers’ compensation but you don’t carry an insurance, your best chance is to speak with Workers Compensation Lawyer Los Angeles  and explore your legal options. In most cases, you will be advised to purchase an insurance, but if it is too late for that, you will probably end up paying for your employee’s medical costs on your own.

In the best possible outcome, you will be given a chance to negotiate the settlement with your employee. If he or she is open for negotiations and understand your situation, a skilled attorney could get you a fair deal.

However, keep in mind that most injured employees who know about workers’ compensation won’t give up on their benefits that easily. They might pressure you, threaten to file a personal lawsuit against you and/or contact the workers’ compensation appeals board. If they hire an experienced attorney, you may be in even greater problems and may lose your entire business.

Obtain Coverage Immediately

In the end, your final option is to obtain coverage as soon as possible. If you manage to do so, you will avoid all potential fees and be able to cover for your injured employee’s medical coverage.

However, you can hire an attorney to investigate the following, and potentially get you out of this complicated situation:

• There was no actual injury in the workplace
• There was no work-related accident
• The employee sustained the injury but was not disabled
• The employer was sold an incorrect insurance policy by the broker
• Perhaps another employer is liable (in situations where contractors and subcontractors work together)

Once everything checks out, you may have a way out. Remember to speak with Workers Compensation Attorneys In Los Angeles, and ask for help in dealing with this situation.