California Changes Requirements for Officer Worker's Comp Coverage

September 27, 2016

The California state legislature has modified the requirements for an officer or member of the board of directors to elect to be excluded from workers’ compensation insurance coverage.


What’s changing? 

California requirements for Officer Exclusion


When will change occur?

Policies effective January 1, 2017 and later


How will this impact you?

The requirement that 100% of the stock must be owned by an officer or director has been eliminated.

  • Officers or directors seeking exclusion must own at least 15% of the outstanding stock of the corporation, and execute a waiver of coverage stating that the individual qualifies.

  • For general partnerships and limited liability companies, the individual needs to sign a waiver, stating they qualify as a general partner or managing member.

  • The waiver will remain in effect until a written withdrawal is received by the insurance company and waivers are not transferable to a new insurance company.

  • Grantors of revocable trusts are no longer deemed to be shareholders and will not qualify for exclusion.

Where you can find more information?

Simply contact us or review a copy of the changes to the labor code available on the California Legislature website


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