Workers Compensation Small Deductible Plan – Worth It?
A California employer emailed a question about a Workers Compensation small deductible plan recently. California small deductible plans do exist, as in many states. California’s WCIRB (Rating Bureau) published an advisory plan that you can download at this page. (Highly recommended)
The California small deductible plan was recently updated on 7/26/2026. Let’s cover some of the details. The plan cannot be applied to other states. The general concepts covered apply to most small deductible plans. Contact us for further info on another state.
Small deductible policies do come with a few concerns.
Highlights From the WCIRB Plan
My comments are italicized.
The California Small Deductible Plan permits an employer who is insured for its workers’ compensation
liability to reimburse the insurer for losses incurred up to the deductible amount elected in connection with the workers’ compensation insurance coverage. In exchange for agreeing to reimburse the insurer, the employer receives a premium reduction.
The minimum deductible amount available under this Plan is $500. The maximum deductible amount
available under this Plan is $75,000.
A minimum of $5,000 of estimated annual workers’ compensation standard premium is required to be
eligible for this Plan.
Unless otherwise mandated by law, an irrevocable letter of credit or other security in a form acceptable to the insurer is required as security for ultimate claim payments.
The California Workers’ Compensation Uniform Statistical Reporting Plan—1995 requires that gross
incurred losses, prior to the application of the deductible, be reported. Total payroll and final premium,
prior to the application of the deductible premium credit, shall also be reported.
One of the main concerns that Workers Compensation small deductible insureds find out after a policy begins is that the deductible amounts are reported for its Experience Mod (X-Mod) rating. That is why I recommend reading the Small Deductible Rating Plan and your policy before agreeing to this type of program.
Conclusion- What To Know
Think of a California small deductible or any type of workers compensation small deductible program as another option to discuss with your insurance carrier and agent.
