Workers Comp Blog

What is the California State Compensation Insurance Fund and Its Purpose?

Taking a risk can sometimes lead to the best of opportunities. When it comes to your business insurance however, risk can be a potential setback. Many companies that are considered “high risk” can have a more difficult time obtaining insurance coverage. That’s why the insurance department teamed up with the California state labor department and created the Workers Comp Joint Underwriting Associations (WCJUA) or Joint Underwriting Associations (JUA) to accept the “hard-to-place” businesses. Keep in mind that the WCJUA for each state will go by a different title depending on location, High Risk Pool, a Residual Market, and or Assigned Risk Plan. (Click here to see a list of the names the WCJUA goes by in your state)

The California WCJUA …

The main California WCJUA goes by the name State Compensation Insurance Fund, Statefund, and or SCIF.  The California Statefund is a carrier organized to provide workers comp coverage for a certain type of high risk that experiences difficulties obtaining coverage in the open market. SCIF shares in both the profits and losses connected with the program and are often required to write a certain percentage of hard-to-place quotes with the WCJUA. Policyholders will be placed in this program as a last resort and should consult with a broker on the best plan to graduate from the program to the open market.

The California Statefund is typically needed by those with/in …

  • A small number of employees
  • No prior industry experience, such as new business owners
  • A high risk industry (ex. roofers, tree trimmers, skydivers, etc.)
  • Chronic premium payment issues
  • Multiple claims with a unprofitable loss ratio

Brokers often must show a client is considered hard-to-place after their quotes/application gets rejected by at least three open market companies.

A WCJUA’s Benefits and Drawbacks are …

  • Benefits
  1. This program provides an option for a quote to clients who have nowhere else to turn and are in great need of assistance in obtaining coverage. They truly get the help and coverage they need
  2. Provides similar coverages offered by any other workers comp carrier with workers comp benefits to injured employees


  • Drawbacks
  1. Higher premiums, and sometimes a higher minimum premium, than if in open market because WCJUA policies have multipliers above your experience modification factor
  2. Strict underwriting guidelines that are heavily regulated by the state
  3. Other States coverage is often limited or excluded from the quote/policy, forcing business owners who have employees in another state to purchase a separate policy for them
  4. The application process is long, tedious, and includes a lot of paperwork, at times taking up to a month to get a policy issued

The California Statefund provides help in the most desperate times to ensure coverage for even the riskiest of clients. Contact a qualified commercial insurance broker to find out if the California State

Compensation Insurance fund is the right place for you or to take a look at your current SCIF policy. If so, also consider discussing a plan for reentering the open market to alleviate you from the high premiums of a WCJUA so you can get back on track with paying the best rates!