It’s the law
Workers Compensation law was established in most states between 1910 and 1920. It is designed as a trade-off. In exchange for preventing employees from being able to sue employers for on-the-job injuries or illness there is a requirement for employers to maintain workers’ compensation insurance. It is required even if you only have one employee.
Failure to have workers’ compensation coverage is considered a criminal offense. In California the basic punishment is either a fine of up to $10,000 or up to one year of jail time with other penalties on top of that.
What if I have no employees?
Unless you’re a roofer, you are usually not required to have workers’ compensation coverage. However, it is required for any employee you hire even if it is only temporary. We have seen customers hire casual labor who ended up being injured. For that reason, we recommend all businesses have a workers compensation policy even if they currently have no employees. A minimum-premium policy (also called a certificate policy) typically runs between $500 and 600 per year.
For more information
CA Div of Workers Compensation: Employers Frequently Asked Questions http://www.dir.ca.gov/dwc/faqs.html
We’re all used to seeing the various advertisements from banks that tell us that we’re safe using their website for banking. Unfortunately, that only protects personal accounts. That’s right, under federal law, only personal accounts are protected from loss from computer fraud. There is no such protection for business. What about all of the sole proprietors that operate entirely out of their personal checking account? Well, from the reading I’ve done by using it both for personal and business purposes you will lose the protection you would have for just a personal account.