Skip to main content

California Workers Compensation Officer/Partner Exclusion Update Work Comp Legislation SB 198

By May 15, 2018 June 8th, 2020 Insurance

This past year, there have been many legislative changes concerning California Workers Compensation Officer and Director exclusions.


SB189 Highlights for policies effective on and after July 1, 2018;

  • The stock ownership requirements for corporate officers have been lowered to 10%, with an added requirement that they must be covered by a health care policy. Note: If you were ineligible before at 15%, but are eligible now at 10%, be sure to submit your waiver.
  • Certain corporate officers can be eligible for exclusion, if they own at least 1% of the stock AND if their parent, grandparent, sibling, spouse, or child owns at least 10% of issued and outstanding stock.
  • Officers and Directors of a cooperative corporation may be eligible for exclusion, if they are covered by a health care policy or service plan.
  • Individuals holding the power to revoke a trust of a private corporation/partnership/LLC are eligible for exclusion.
  • Owners of professional corporations rendering professional services are eligible for exclusion.
  • Sole shareholders of corporations (private or professional) are automatically excluded — no waiver necessary — but can be included for coverage.
  • All waivers should be submitted by the effective date of the policy. As an insurance company, they have a 15 day grace period to accept the waiver and allow the exclusion back to the inception date of the policy (effective July 1, 2018 and after).
  • See the Senate Bill on the California government site: SB 189 Officer / Director exclusion rules.

IT IS VERY IMPORTANT THAT EACH OFFICER SIGN THE FORM AND RETURN IT TO YOUR WORKERS COMPENSATION CARRIER OR YOU WILL AUTOMATICALLY BE INCLUDED AND THERE IS VERY LITTLE FLEXIBILITY TO CORRECT THIS IF YOU EXCEED THE 15 DAY GRACE PERIOD.

If you need assistance or quotations on your companies Workers Compensation Insurance contact our office at 877-428-8778.