For the managing brokers/owners out there...do you all have workers comp for your agents? Obviously as 1099'd contractors they are not employees but one of my insurance folks has cited some instances where basically an agent gets in a wreck or something while in the course of their real estate business as an agent of XYZ company and the injured party could be due workers comp. Anyone else every had this issue or gotten workers comp for such a situation? It's not expensive and I'd rather be over insured than under but to be honest, it's the first i've heard of it.

In California we HAVE to have workers comp if we have agents.. yuck..

Auburn CA, where did you see this requirement? I am a broker owner and currently provide workers comp for my agents, however a well respected and elected District Attorney in California just told me last week that in all his years he has never prosectured a broker for not having workers comp. He said its a huge grey area and although the DRE and CAR say its "strongly recommended", its not required. Please state the language you saw that said its required.

VM....this came from the CAR Legal Hotline

Q. As a broker, do I have to provide WC for my salespersons?

A. Yes. By law, all employers are required to maintain WC ins for their employees for injuries occurring whithin the course and scope of employment. Employers may not require their employees to pay for the coverage. While independent contractors are excluded from both of these requirements, the California Labor and Workforce Development Agency considers a RE salespeson to be an employee for the purposes of WC insurance. Thus, it is highly recommended that brokers obtain and pay for coverage for salespersons as a matter of sound business practice. The penalties can be very costly if you, as a broker, are found in violation of the WC laws.

My WC coverage provider writes:

Penalties for not carrying WC insurance on covered workers include:

oo A misdemeanor punishable by up to one year in jail and up to
$10,000 in files.

oo Citations and enforcement issued by the California Labor and
workplace developmen agency.

oo Issuance of a stop order prohibiting further operation of
the business or use of "employee labor".

oo Private actions based on other statutes.

(Don't you just hate it when they throw in "other statutes" aka. throwing the book at you ?)


I also have a 2004 four-page memorandum on these requirements from CAR attorneys and if you would like to read that, I can e-mail or fax to you.

I have hear the term grey area indeed when I inquired about WC, but in the interest of staying in compliance, I pay the premium on a quarterly basis based on commissions paid to licensees.

"While independent contractors are excluded from both of these requirements, the California Labor and Workforce Development Agency considers a RE salespeson to be an employee for the purposes of WC insurance."

That just seems crazy to me that in one instance they can say there an independant contractor and another they are an employee.I would either fight this law or have it shored up more for clarification.

"all employers are required to maintain WC "
Your agents should be independent contractors

"Thus, it is highly recommended that brokers obtain and pay for coverage for salespersons as a matter of sound business practice. The penalties can be very costly if you, as a broker, are found in violation of the WC laws."

Exactly "strongly recommended". no where does it say its a requirement. They say WC is strongly recommended for ALL businesses.