Q. My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?

A. Generally, if you are the sole owners of the business, coverage for yourselves, is optional if you wish to pursue it. You would need to have workers' compensation coverage for any employees you may hire. You should consult with your attorney, insurance agent or broker, or carrier regarding the specifics of you situation and your options.

Labor Code 3600.  (a) Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person except as otherwise specifically provided in Sections 3602, 3706, and 4558, shall, without regard to negligence, exist against an employer for any injury sustained by his or her employees arising out of and in the course of the employment and for the death of any employee if the injury proximately causes death, in those cases where the following conditions of compensation concur:
   (1) Where, at the time of the injury, both the employer and the employee are subject to the compensation provisions of this division.

   (2) Where, at the time of the injury, the employee is performing
service growing out of and incidental to his or her employment and is
acting within the course of his or her employment.
   (3) Where the injury is proximately caused by the employment,
either with or without negligence.
   (4) Where the injury is not caused by the intoxication, by alcohol
or the unlawful use of a controlled substance, of the injured
employee.  As used in this paragraph, "controlled substance" shall
have the same meaning as prescribed in Section 11007 of the Health
and Safety Code.
   (5) Where the injury is not intentionally self-inflicted.
   (6) Where the employee has not willfully and deliberately caused
his or her own death.
   (7) Where the injury does not arise out of an altercation in which
the injured employee is the initial physical aggressor.
   (8) Where the injury is not caused by the commission of a felony,
or a crime which is punishable as specified in subdivision (b) of
Section 17 of the Penal Code, by the injured employee, for which he
or she has been convicted.
   (9) Where the injury does not arise out of voluntary participation
in any off-duty recreational, social, or athletic activity not
constituting part of the employee's work-related duties, except where
these activities are a reasonable expectancy of, or are expressly or
impliedly required by, the employment.  The administrative director
shall promulgate reasonable rules and regulations requiring employers
to post and keep posted in a conspicuous place or places a notice
advising employees of the provisions of this subdivision.  Failure of
the employer to post the notice shall not constitute an expression
of intent to waive the provisions of this subdivision.
   (10) Except for psychiatric injuries governed by subdivision (e)
of Section 3208.3, where the claim for compensation is filed after
notice of termination or layoff, including voluntary layoff, and the
claim is for an injury occurring prior to the time of notice of
termination or layoff, no compensation shall be paid unless the
employee demonstrates by a preponderance of the evidence that one or
more of the following conditions apply:
   (A) The employer has notice of the injury, as provided under
Chapter 2 (commencing with Section 5400), prior to the notice of
termination or layoff.
   (B) The employee's medical records, existing prior to the notice
of termination or layoff, contain evidence of the injury.
   (C) The date of injury, as specified in Section 5411, is
subsequent to the date of the notice of termination or layoff, but
prior to the effective date of the termination or layoff.
   (D) The date of injury, as specified in Section 5412, is
subsequent to the date of the notice of termination or layoff.
   For purposes of this paragraph, an employee provided notice
pursuant to Sections 44948.5, 44949, 44951, 44955, 44955.6, 72411,
87740, and 87743 of the Education Code shall be considered to have
been provided a notice of termination or layoff only upon a district'
s final decision not to reemploy that person.
   A notice of termination or layoff that is not followed within 60
days by that termination or layoff shall not be subject to the
provisions of this paragraph, and this paragraph shall not apply
until receipt of a later notice of termination or layoff.  The
issuance of frequent notices of termination or layoff to an employee
shall be considered a bad faith personnel action and shall make this
paragraph inapplicable to the employee.
   (b) Where an employee, or his or her dependents, receives the
compensation provided by this division and secures a judgment for, or
settlement of, civil damages pursuant to those specific exemptions
to the employee's exclusive remedy set forth in subdivision (b) of
Section 3602 and Section 4558, the compensation paid under this
division shall be credited against the judgment or settlement, and
the employer shall be relieved from the obligation to pay further
compensation to, or on behalf of, the employee or his or her
dependents up to the net amount of the judgment or settlement
received by the employee or his or her heirs, or that portion of the
judgment as has been satisfied.