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Insurance by Need

Hiring Your First Employees

The moment you hire your first employee, California law requires you to carry workers' compensation insurance — there's no small-employer exemption, and going without it can bring steep penalties and even a stop-work order. Payroll also opens the door to employment-related claims a general liability policy simply won't cover.

Coverage to Consider Schedule Consultation

Who this coverage is for

This is for owners moving from solo operator to employer, hiring their first W-2 staff. It's also for businesses that have been running on contractors and are now bringing people onto payroll.

What it can help protect

Your first hire creates obligations and risks you didn't have before:

  • Workers' comp — medical bills and lost wages for on-the-job injuries, which California requires from your first employee.
  • Employment liability — claims of wrongful termination, discrimination, or harassment.
  • Dishonesty — losses if an employee steals money or property.
  • General liability — third-party injuries and damage as your operations grow.
  • Compliance — meeting California's mandatory coverage rules so you avoid penalties.

What to gather

A payroll estimate, role descriptions, expected start date, and any questions about remote work or multi-state employees will help Sterling Lloyd route the review correctly.

Coverages to consider

The coverages most relevant to Hiring Your First Employees, tiered by priority. Start a quote on any one, or have an advisor review the whole stack.

Core Often required

Workers' Compensation Insurance

Required in CA from your first employee.

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Recommended

Employment Practices Liability Insurance (EPLI)

Covers harassment, discrimination, and wrongful-termination claims.

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Recommended

Group Health Insurance

Attract and retain talent with benefits.

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Situational

General Liability Insurance

Broader liability as your team grows.

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Have an advisor review the whole stack →

Common Questions