Worker's Compensation Insurance

13 Businesses that are interested in learning more about State Fund can contact State Fund directly by using the information provided in the “Resources” section of this brochure or a licensed commercial broker-agent. To become self-insured, a business must obtain a certificate from the DIR’s Office of Self-Insurance Plans (OSIP). Private employers must post security, or enter into alternative security deposit program agreements with the Self insurers’ Security Fund, as a condition of receiving a certificate of consent to self- insure. While historically, only very large companies could self- insure because of legal requirements, in recent years, group self-insurance, in which several small employers in the same homogenous industry pool their workers’ compensation liabilities, has increased in popularity as an alternative to traditional coverage. For complete information on workers’ compensation self- insurance, contact the OSIP with the information shown in the “Resources” section. What Happens If an Employer Fails to Purchase Workers’ Compensation Insurance? Employers that fail to purchase workers’ compensation insurance are in violation of the California Labor Code. The Division of Labor Standards Enforcement (DLSE) has the authority to issue a stop order against any employer that is discovered to be unlawfully uninsured for workers’ compensation. A stop order closes down business operations until workers’ compensation insurance is secured. Besides issuing a stop order, the DLSE can assess fines based on whether an employer has been discovered to be unlawfully uninsured through normal investigation or through the filing of an injured workers’ claim with the Uninsured Employers Benefit Trust Fund.