What is the penalty for failing to have workers' compensation insurance?

The penalty for failing to have workers' compensation insurance includes fines, legal liability, and potential criminal charges. In California, having workers' compensation insurance is not just a requirement for contractors but a legal obligation designed to protect both workers and employers. When a contractor does not comply with this requirement, they may face significant repercussions, including financial penalties imposed by regulatory agencies.

In addition to fines, the contractor can be held legally liable for any injuries sustained by employees while on the job without proper insurance coverage. This liability can manifest in costly lawsuits and damages. Furthermore, there are circumstances where failing to have this insurance can result in criminal charges, especially if the non-compliance is willful or egregious.

The other options do not encompass the breadth of penalties that exist for non-compliance with workers’ compensation insurance requirements. While a warning might be issued initially for some minor infractions, the legal system has strict standards regarding workers’ compensation that lead to more serious consequences than just a warning. Increased insurance premiums could result from past non-compliance but are not direct penalties. Loss of customer trust is more of a reputational consequence rather than a legal penalty. This highlights the importance of maintaining proper workers’ compensation coverage to avoid these serious ramifications.