Penalty to ER who fails to secure payment of compensation is double the amount of premium, minimum _____________

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

Penalty to ER who fails to secure payment of compensation is double the amount of premium, minimum _____________

Explanation:
When an employer fails to secure payment of workers’ compensation, the penalty is designed to deter noncompliance by requiring payment of twice the premium that would have been due, with a minimum floor. The minimum penalty is $10,000, so the penalty is the greater of two times the premium or $10,000. This ensures a meaningful consequence even for small premium amounts. For example, if the due premium would have been $4,000, the penalty would be $8,000 by doubling, but the minimum makes it $10,000. If the premium would have been $15,000, the penalty would be $30,000.

When an employer fails to secure payment of workers’ compensation, the penalty is designed to deter noncompliance by requiring payment of twice the premium that would have been due, with a minimum floor. The minimum penalty is $10,000, so the penalty is the greater of two times the premium or $10,000. This ensures a meaningful consequence even for small premium amounts. For example, if the due premium would have been $4,000, the penalty would be $8,000 by doubling, but the minimum makes it $10,000. If the premium would have been $15,000, the penalty would be $30,000.

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