Who must establish a self-insured program in California?

The requirement for establishing a self-insured program in California is specifically tied to employers who have been approved by the Department of Industrial Relations (DIR). In California, self-insurance allows employers to assume the financial risk of compensating their employees for work-related injuries instead of purchasing insurance through an insurance carrier.

This process is regulated by the DIR to ensure that only those employers who meet specific financial criteria and can demonstrate the ability to pay claims can operate a self-insured program. The oversight is critical because workers' compensation is a mandated benefit, and the DIR needs to ensure that there are adequate resources to meet the obligations to injured workers.

Other entities or types of individuals, such as any business operating in California, large corporations with over 500 employees, or independent contractors seeking to self-insure, do not automatically qualify to establish a self-insured program unless they have gone through the proper approval channels set forth by the DIR. These qualifications are in place to protect both the coworkers and the injured workers by ensuring there is a reliable mechanism for compensation in place.