If you have only one employee, must you have workers' comp insurance?

• A. No
• B. Yes
• C. Only if the employee is part-time
• D. Only if the employee handles hazardous materials

Answer: (B)

In California, workers’ compensation coverage is required for any employer with employees. That means even if you have just one employee, you must carry workers’ comp. The purpose is to provide medical care and wage replacement if the employee is injured on the job, and to protect you from being personally liable for those costs. The main caveat is if that one person is truly an independent contractor, not an employee, in which case workers’ comp for that worker isn’t required; but misclassifying someone as a contractor can bring penalties. For a standard “one employee” situation, the correct answer is that you must have coverage.