If you have an idea around which you would like to start a business, you just launched operation or you have been in business for a while now, you should be aware that having employees require you by law to invest for different types of insurance policies including worker’s compensation insurance, unemployment insurance and disability insurance.

In California, the Employment Development Department, also known as EDD, offers a variety of services to millions of Californians under different programs including the job service, unemployment insurance, disability insurance, workforce investment and labor market information. One of the many activities managed by the EDD is the State Disability and Unemployment Insurance.

Based on the EDD’s website: “Through the Unemployment Insurance (UI) and State Disability Insurance (SDI) programs, the EDD provides partial wage replacement benefits to eligible California workers. These insurance programs provide a strong stabilizer to California’s economy and are designed to assist those who are out of work.

Funded through employee payroll deductions, SDI provides Disability Insurance (DI) benefits to eligible workers who suffer a loss of wages when they are unable to work due to their own non-work-related illness, injury, or pregnancy… The UI program is funded from UI taxes paid by employers on the first $7,000 of each employee’s wages. The UI provides unemployment insurance payments to workers who lose their job through no fault of their own and who are able to work, available for work, looking for work each week, and who meet all other UI eligibility requirements.” For more information, please click HERE to visit the EDD’s website.

That being said, you need to keep in mind that while Disability insurance provides coverage for injury or sickness not related to the job, you need to make sure that you purchase Workers’ Compensation as well which offers benefits and coverage for injuries and illnesses caused by the job. Click HERE to read more about Workers’ Compensation Insurance.