What If My Employer's Workers' Comp Insurance Lapsed in California?

Workers usually learn about a lapse at a bad moment: an adjuster finds no policy, a letter says coverage was canceled, or the boss admits the insurance ran out. A lapse sounds final, but it is really a question of dates.

Is my injury covered if my employer's workers' comp policy lapsed?

It depends on whether a valid policy was in force on your date of injury. The lapse date matters only when you compare it to that day.

Labor Code 3700 requires every employer except the state to carry workers' comp insurance or to be approved to self-insure. When coverage is missing, the state's test is whether the employer "had failed to secure the payment of compensation" on "the date of the alleged injury" (Labor Code 3715). An insurer is "directly and primarily liable" for the compensation the employer owes, subject to the policy's own terms (Insurance Code 11651).

The table shows the usual result.

What if the policy lapsed after I was already hurt?

A later lapse does not take away coverage for an injury that happened while the policy was in force.

The insurer that covered your injury date remains the one responsible for that injury. A lapse months later does not hand your claim to the state. The Uninsured Employers Benefits Trust Fund (UEBTF) is for workers whose employer was illegally uninsured, and Labor Code 3716(b) says the fund "is not created as a source of contribution to insurance carriers, or self-insured, or legally insured employers."

Keep your claim number and keep treating. If an adjuster suggests that coverage ended, ask in writing for the policy number and its start and end dates. Disputes over whether an insurer is liable go to the Workers' Compensation Appeals Board (WCAB) (Labor Code 5300).

Did the policy really end on the date your employer says?

Not always. California law sets notice rules that an insurer must follow before it cancels or refuses to renew a workers' comp policy.

Once a policy is in effect, Insurance Code 676.8 says a cancellation notice is not effective unless it follows the section's notice rules and rests on a listed reason, such as unpaid premium, unreported payroll, a material safety violation or misrepresentation. For unpaid premium, the insurer must give 10 days' written notice; for a safety violation or a major change in the business, 30 days. If the employer fixes the problem to the insurer's satisfaction within that time, the policy cannot be canceled.

Nonrenewal has its own clock. Under Insurance Code 11664, an insurer that does not plan to renew must give notice 30 to 120 days before the policy period ends. If it misses that window, the policy continues for 60 days after it gives the notice. There are exceptions, for example when the employer already has replacement coverage, or when the insurer offered to renew at a rate increase under 25 percent.

These notices go to the employer, but they explain why a claimed lapse date may not be the legal end of coverage.

How do you find the policy dates?

Start with the workplace poster and the rating bureau's coverage search, then ask for written answers.

• The workplace poster. The DWC's fact sheet on the uninsured employers fund says the workers' comp poster should name who handles claims and show the policy expiration date. A missing poster is itself evidence that the employer was not insured (Labor Code 3550).
• The coverage search. The same fact sheet points workers to the Workers' Compensation Insurance Rating Bureau (WCIRB) coverage search when they are not sure an employer was insured on the injury date. The DWC's step-by-step guide to a fund claim says to search the past five years and that the bureau waives its usual fees for injured workers. Under Labor Code 3715, the lack of a bureau record is itself evidence that the employer was uninsured.
• Self-insured employers. Check the state's self-insured employer search.
• Licensed contractors. Insurers report each contractor's policy start, lapse and cancellation dates to the Contractors State License Board (Business and Professions Code 7125).
• Written answers. A written denial from the insurer your employer names is itself evidence that the employer was uninsured (Labor Code 3715). The state can also demand that an employer name its insurer in writing within 10 days (Labor Code 3711).

Our guide on how to check whether an employer has workers' comp insurance walks through each lookup.

What if your employer was uninsured on the day you were hurt?

You can still bring a workers' comp case at the WCAB, and if the employer does not pay the award, the UEBTF can.

Under Labor Code 3715(a), you file an application with the WCAB, which decides it like any other claim and makes the award you would have received if the employer had been insured. If the employer does not pay within 10 days after notice of the award, the UEBTF pays it (Labor Code 3716(a)). The fund has no liability unless the employer has appeared in the case or has been served with the application and a special notice of lawsuit (Labor Code 3716(d)). The DWC fact sheet adds that the fund may pay before an award at its discretion.

You may also sue the employer in civil court (Labor Code 3706). In that lawsuit, the employer is presumed negligent and must prove otherwise (Labor Code 3708).

The employer also faces a stop order (Labor Code 3710.1), possible criminal charges (Labor Code 3700.5) and penalties (Labor Code 3722), but those penalties go to the UEBTF, not to you. Our guides to claims against the uninsured employers fund and to employers with no insurance at all cover the fund steps and the wider picture.

What if your injury built up over time across the lapse?

For a cumulative injury, the law looks at a one-year liability period, and an insurer that covered part of that year can be responsible for the whole injury.

A cumulative injury has a legal date of injury: the date you first had disability from it and knew, or should have known, that work caused it (Labor Code 5412). Labor Code 5500.5 limits liability to employers during the one year before that date or before your last day of exposure, whichever comes first. If no employer was insured during that year, liability moves back to the last year of exposure when an employer was insured.

The fund steps in for these claims only when no employer during that period was insured or lawfully self-insured, and a worker with a cumulative injury cannot choose to go after the uninsured employer instead (Labor Code 3716(b)). A lapse in the middle of a long job can therefore leave an insurer responsible for an injury that kept building after its policy ended. See our guide to cumulative trauma claims.

What should you do now?

Report the injury and file the claim form as if coverage existed, then pin down the policy dates in writing.

1. Report the injury in writing within 30 days (Labor Code 5400) and file the DWC-1 claim form with your employer (how the DWC-1 works).
2. Get treatment. If a policy covers the date, the employer must authorize care within one working day after the claim form is filed, up to $10,000 while the claim is decided (Labor Code 5402).
3. Collect the coverage record. Save the coverage search result, a photo of the poster, any cancellation letters and your pay records.
4. If there was no coverage, file an Application for Adjudication with the WCAB, name the employer by its legal name and have it served, as the DWC guides on naming and serving an uninsured employer explain.

When does a lawyer help with a lapsed policy?

A lawyer helps most when the employer and an insurer blame each other, when a cumulative injury spans the lapse, or when a fund claim needs the employer named and served.

Yazdchi Law P.C. represents injured workers across California from its office in Palmdale and reviews each matter individually. The fee request is usually 15% to 18%, a workers' comp judge must approve it, and Labor Code 4906 governs it; see how workers' comp attorney fees work. Call (661) 273-1780 or use the contact form. For the next stages after the claim form, see the California workers' comp claim process, and for the insurance duty itself, see Labor Code 3700 and employer insurance.