A construction boom is coming to California in the wake of the recent devastating wildfires, and it carries significant implications for the state’s workers’ compensation system as communities build back their homes and communities.

John P. Kamin

The 1994 Northridge earthquake serves as a uniquely similar point of comparison. After a devastating 6.8-magnitude earthquake struck the San Fernando Valley and surrounding areas, countless homes had structural damage. Seemingly endless damage to foundations, framing and fixtures created infinite demand for general contractors to fix people’s homes.

Having lived through that event, I personally observed:

• Reputable and ethical contractors turning away countless jobs because they already had endless work.
• Unethical contractors taking $10,000 deposits and disappearing for months, and sometimes never returning at all.
• Code enforcement taking forever to review and approve repairs and construction work.
• Cost overruns for materials causing contractors to renege on original estimates and demand more money for necessary materials and supplies.
• Unlicensed contractors doing shoddy work.

With the current estimate of 12,000 structures lost in January 2025, and hundreds more lost or damaged in November and December of 2024, a repeat of this scenario seems inevitable.

For us workers’ compensation practitioners, the multilayered levels of general contractors hiring subcontractors who outsource to even smaller subcontractors creates coverage problems, especially when one of those contractors along the chain 1) has an employee who suffers a work-related injury and 2) that contractor has no coverage. For insurance carriers, it is important to emphasize that your insureds are properly licensed and bonded and that they will do their due diligence in hiring subcontractors with valid workers’ compensation coverage.

If this all sounds familiar, it’s because the California Legislature recently required licensed contractors to obtain workers’ compensation coverage. The original deadline to obtain coverage was Jan. 1, 2026, but during the last legislative session, lawmakers postponed that deadline until Jan. 1, 2028. Lawmakers also mandated that the Contractors State License Board create a “process and procedure” by Jan. 1, 2027, that permits an exception to the coverage requirement.

A learning moment

Unprecedented hurricane-force winds of 70-100 mph were an unwelcome surprise to longtime Californians, including me. But perhaps we as a society can learn from this extraordinary tragedy and implement changes for the better.

Over the centuries, horrific fires have prompted beneficial changes to society. Here are a few quick examples:

• The Triangle Shirtwaist Factory fire of 1911, which killed 146 garment workers, is the tragic event that is credited with the creation of the workers’ compensation system that most states have adopted today.
• Massive fires in municipalities in the 1800s and 1900s were traced back to laundry lint, including the Great Chicago Fire of 1871. This led manufacturers to develop complex and effective lint traps, which quite literally keep our homes from burning down.
• The Yarnell Hill Fire in 2013 killed 19 firefighters in Yarnell, Arizona. Most of the firefighters lived in the community of Prescott, where I used to live. This fire was the sixth-deadliest firefighter disaster in history and led to stringent investigation of what went wrong and how it could have been avoided.

So while the recent horrific wildfires are far from ideal, perhaps we as a society can learn from them and improve public safety in new ways.

Takeaway

As Southern California rebuilds and renews itself from the tragic wildfires, a construction boom is likely on its way. We urge all homeowners and contractors to make sure that the parties they hire are licensed, bonded and have workers’ compensation coverage. After all, the Workers' Compensation Insurance Rating Bureau’s website is only one click away.

John P. Kamin is a workers’ compensation defense attorney and equity partner at Bradford & Barthel’s Woodland Hills location. He is WorkCompCentral's former legal editor. This entry from Bradford & Barthel's blog appears with permission.