The California Workers' Compensation Owner Exclusion Form (often called the "Owner Exclusion" or "Owner’s Exclusion Form") is a document that allows a property owner to exclude themselves from coverage for injuries that occur on their own premises. For employers, this form can affect premium calculations, loss cost allocations, and the overall risk profile of your workers' comp policy.

Understanding when and how to use the Owner Exclusion is essential to keep your rates accurate and avoid unexpected coverage gaps. Below we break down the key points every California employer should know.

What Is the Owner Exclusion Form?

In California, the Owner Exclusion Form (OC 01) is filed with the Workers' Compensation Insurance Rating Bureau of California (WCIRB). It tells the rating bureau that the property owner is not an employee and should not be included in the payroll used to calculate workers' comp premiums. This is common for owners who are not actively working on the site, such as landlords, building owners, or contractors who own the job site but do not perform labor.

When Is the Form Required?

• Non‑employee owners: If you own a building, warehouse, or construction site but do not draw a salary or wages from the work performed there.
• Contractors with multiple projects: When you own the job site but subcontract all labor to other companies.
• Farm operators: Owners who lease land to farmworkers but do not work the fields themselves.

If any of these scenarios describe your business, you should discuss the Owner Exclusion with your broker.

How the Form Impacts Your Premiums

Workers' comp premiums are based on payroll, class codes, and loss costs. By excluding the owner’s payroll (often $0), you reduce the total payroll amount used in the rating formula. This can lower the premium, but only if the exclusion is correctly filed and the owner truly meets the criteria.

Be aware that the WCIRB reviews each exclusion for accuracy. If an audit later shows the owner performed work, the insurer can retroactively adjust the premium and may assess penalties.

Steps to Complete the Owner Exclusion Form

1. Confirm eligibility: Verify that the owner does not receive wages, salary, or any form of compensation for work on the site. Check the California Department of Industrial Relations (DIR) guidelines.
2. Gather documentation: Collect proof of ownership (deed, lease), payroll records showing $0 wages for the owner, and any contractor agreements.
3. Complete OC 01: Fill out the Owner Exclusion Form with the property address, owner name, and indicate "No payroll".
4. Submit to your broker: Your broker will forward the form to the WCIRB and attach it to your policy.
5. Maintain records: Keep the form and supporting documents for at least three years in case of an audit.

Common Mistakes to Avoid

• Misclassifying an employee as an owner: If the owner occasionally performs work, even a few hours a month, the exclusion is invalid.
• Leaving the form blank or incomplete: Missing fields can cause processing delays and result in a default rating that includes the owner’s payroll.
• Failing to update the form after a change: If the owner starts working on the site, you must remove the exclusion immediately.

Frequently Asked Questions

Do I need an Owner Exclusion if I’m a sole proprietor?

Yes, if you are the sole owner and you do not take a salary or wages from the business, you can file the exclusion. However, you must be able to prove that no compensation was received for work on the premises.

Will filing the exclusion affect my workers' comp coverage?

No. The exclusion only removes the owner from the payroll used to calculate premiums. It does not change the coverage limits for your employees.

How often should I review the Owner Exclusion?

Review it annually or anytime there is a change in ownership, payroll, or job site usage. Your broker can set a reminder during the policy renewal process.

Can I use the Owner Exclusion for multiple properties?

Each property requires its own OC 01 form. Submit a separate form for every site where the owner is excluded.

What happens if the WCIRB audits my exclusion?

The bureau may request payroll records, contracts, and proof of non‑employment. If they find the owner performed work, the insurer can adjust the premium retroactively and may assess penalties.

Next Steps for California Employers

Talk to a knowledgeable broker who understands California’s rating rules. We can review your ownership structures, verify eligibility, and file the Owner Exclusion correctly to protect your premium dollars.

For a personalized assessment, explore our workers' comp insurance services or read related insights on our blog. Our experienced staff, featured on the team page, is ready to help.

Get a free policy review — call 859-407-4888 or request a quote.

Joe Baxter, Licensed Insurance Agent, The Workers' Comp Experts