If you've been injured at work in California, the workers' comp insurer is supposed to be processing your claim, paying your benefits, and authorizing your medical care. That's the law. But some insurers delay, deny, and pressure injured workers in ways that cross clear statutory lines — and knowing the difference between a slow system and outright bad faith could be worth thousands of dollars on your case.
We've recovered over $150,000,000 for injured workers across Southern California. Here are the seven warning signs we see most often — each tied to a specific California statute — that your insurer may be acting in bad faith.
At a glance — the 7 signs:
- Delays in authorizing treatment past the legal UR deadlines
- Repeated "lost paperwork" and stalling on your DWC-1 form
- Denying clearly work-related care without any valid basis
- Lowball permanent-disability ratings that ignore the QME's findings
- Surveillance and pressure to return to work before you're medically cleared
- Cutting off temporary disability benefits without written notice
- Ignoring penalty exposure under Cal. Lab. Code §5814
1. Unreasonable Delays in Authorizing Treatment Past UR Timelines
California law requires a utilization review decision within 5 business days of receiving a complete treatment request — missing that deadline without explanation is a red flag that your insurer may be acting in bad faith.
California's workers' comp system uses a process called utilization review (UR) — where an insurer evaluates whether your treating physician's requested treatment is medically necessary. The DWC sets strict timelines for this. A non-urgent treatment request must receive a UR decision within 5 business days of the insurer receiving a complete request. That window extends to 14 days at the absolute maximum, and to 72 hours for urgent or expedited requests (Cal. Code Regs., tit. 8, §9792.9.1).
When an insurer blows past those deadlines with no explanation, no denial letter, and no authorization — just silence — that pattern of delay is not administrative backlog. It's a tactic. Every extra week you wait for a surgery authorization or a referral to a specialist is a week your injury progresses untreated.
What to do: Document every request date. If your treating physician submitted a request and you have not received a written decision within 5 business days, your attorney can file a Declaration of Readiness to Proceed (DOR) with the WCAB and request an expedited hearing. Don't wait.
2. Repeated 'Lost Paperwork' and Stalling on Your DWC-1
Your employer is required to hand you a DWC-1 claim form within one working day of learning about your injury — repeated lost paperwork after that point is a documented stall tactic, not an accident.
Under Cal. Lab. Code §5401, your employer must provide you with a DWC-1 claim form within one working day of learning about your injury. Once you submit that form, the insurer has 14 days to accept, deny, or delay the claim — and during that delay period, it must authorize up to $10,000 in medical treatment regardless.
The "lost paperwork" pattern looks like this: your employer says the fax didn't go through. Then the email bounced. Then the claims adjuster was reassigned. Then they need a different form. Then they never received your doctor's notes. Each individual delay sounds plausible. Together, they add up to weeks or months of unpaid benefits and unauthorized treatment.
This pattern is not accidental and it is not harmless. Every day your DWC-1 sits in limbo is a day the filing clock runs differently, your medical treatment sits unauthorized, and your temporary disability benefits accumulate unpaid.
What to do: Submit everything in writing with delivery confirmation — certified mail or tracked email. Keep copies of every submission. If the same "lost" excuse repeats more than once, bring that paper trail to an attorney immediately. It is some of the most compelling bad-faith documentation there is.
3. Denying Clearly Work-Related Care Without Basis
If a qualified medical evaluator issues a permanent-disability rating and the insurer replaces it with a drastically lower number without valid medical support, that discrepancy may constitute bad faith under California workers' comp law.
Under Cal. Lab. Code §4600, your employer — through its insurer — must provide all medical treatment reasonably required to cure or relieve the effects of your work injury. That is a broad, affirmative obligation.
Bad-faith denial of care happens when an insurer rejects treatment that is clearly connected to a work injury without a valid medical or legal reason. Examples we see in practice: a roofer falls from a ladder, fractures two vertebrae, and the insurer denies an MRI because it claims the injury was pre-existing — without any physician examination supporting that claim. Or a warehouse worker develops severe carpal tunnel from repetitive scanning work, but the insurer denies surgery because it hired a paper reviewer who never examined the patient.
A denial is not inherently bad faith — insurers have a right to conduct UR and to dispute causation. The bad faith arises when the denial has no medical or factual support, when it is issued by someone with no relevant clinical expertise, or when the insurer denies care it has already authorized and then quietly reverses that authorization without notice.
What to do: If care is denied, you have the right to an independent medical review (IMR) through the DIR. You also have the right to dispute the denial at the WCAB. An attorney can request an expedited hearing where the denial appears unreasonable on its face.
4. Lowball Permanent-Disability Ratings Ignoring the QME
When a QME (qualified medical evaluator) issues a permanent-disability (PD) rating and the insurer substitutes a drastically lower number without valid medical support, that discrepancy is a serious warning sign.
Here's how the system is supposed to work. When your injury reaches MMI (maximum medical improvement — the point your condition has stabilized), your doctor issues a report. If there is a dispute about the extent of your permanent impairment, a QME — a physician on the state's approved panel — evaluates you and issues a rating under the AMA Guides, 5th edition, as adopted by California. That rating then flows through a formula under Cal. Lab. Code §4658 to produce your weekly PD benefit and the total weeks you are owed.
Bad faith occurs when the insurer disputes the QME's rating not with competing medical evidence but with internal calculations, aggressive deductions, or an AME (agreed medical evaluator) who was selected under pressure and issues a rating far below the QME's findings. The insurer has a right to challenge a QME report through proper legal channels — that is part of the process. What it cannot do is ignore the QME entirely and pay you at a rate it invented.
What to do: Never sign a Compromise & Release (C&R) or a Stipulation with Request for Award before an attorney has reviewed whether the PD rating used to calculate the settlement accurately reflects your QME's findings. A workers' compensation attorney can identify rating manipulation that the average injured worker would have no way to spot.
5. Surveillance and Pressure to Return Before MMI
Insurers may lawfully conduct surveillance, but using that footage to pressure you back to work before your doctor has cleared you crosses into coercive conduct that can support a bad-faith claim.
Insurers in California are legally permitted to conduct surveillance of injured workers. That is not, by itself, bad faith. What crosses the line is using surveillance footage — or the threat of it — as a tool to pressure an injured worker into returning to work before their treating physician has cleared them or before they have reached MMI.
We see this pattern frequently. A claims adjuster calls and mentions, almost casually, that the insurer "has information" suggesting the worker is more capable than reported. No report is provided. No physician has changed the work restrictions. The call is designed to intimidate, not to inform.
Pressure to return to work before MMI is dangerous for two reasons. First, returning too early can worsen your injury and extend your recovery — and the insurer will then argue your worsened condition is a new injury, not a continuation of the original claim. Second, if you return to work under pressure and then break down again, your temporary disability benefits may restart at a lower rate.
Under California workers' comp law, your treating physician's work restrictions are the operative document. Until those restrictions are lifted or modified by your physician — not the adjuster, not the insurer's hired consultant — you are not medically cleared to return.
What to do: Get every restriction and clearance in writing from your treating physician. If you receive pressure calls from an adjuster, document the date, time, and substance of every conversation. Tell your attorney immediately.
6. Cutting Off Temporary Disability Benefits Without Notice
Under Cal. Lab. Code §4650, temporary disability benefits must be paid within 14 days of the insurer's knowledge of your disability — cutting them off without written notice violates that statute.
Temporary disability (TD) benefits — paid at two-thirds of your average weekly wage, subject to a state maximum — are designed to replace your income while you cannot work due to your injury. Under Cal. Lab. Code §4650, those payments must begin within 14 days of the employer's or insurer's knowledge of the disability, and they must continue as long as the disability continues — up to 104 weeks within a 5-year period for most injuries under Cal. Lab. Code §4656.
When an insurer cuts off TD payments without written notice, without a valid return-to-work release from the treating physician, and without a lawful finding that the disability has ended, that is a direct statutory violation — not a paperwork error.
The harm is immediate. Injured workers on TD are often the sole earners in their household. Two-thirds of your pre-injury wage is already a reduction. When that check stops without warning, rent comes due, medical bills stack up, and the insurer is betting that financial pressure will force you to accept a low settlement just to stop the bleeding.
What to do: If your TD payments stop without notice, contact an attorney that day. Your attorney can file for an expedited hearing with the WCAB and seek reinstatement of benefits plus interest. If the stoppage is found to be unreasonable, Cal. Lab. Code §5814 penalties may also apply.
7. Ignoring Penalties Under Labor Code §5814 for Unreasonable Delay
Cal. Lab. Code §5814 allows the Workers' Compensation Appeals Board to impose a penalty of up to 25% of any unreasonably delayed benefit, capped at $10,000 per violation.
Cal. Lab. Code §5814 is the teeth behind California's workers' comp rules. It provides that if an insurer unreasonably delays or refuses to pay any compensation owed — medical treatment, TD benefits, permanent-disability payments, or any other benefit — the WCAB can impose a penalty of up to 25% of the amount delayed, capped at $10,000 per violation.
That "per violation" language matters. Each unreasonably delayed payment, each unauthorized denial of treatment, each cut-off of TD without notice is a separate potential violation. Insurers who engage in systematic bad faith across multiple benefit categories can face stacking penalties that substantially change the economics of a case.
The practical significance: when an insurer knows it is facing competent legal representation and documented §5814 exposure, the cost-benefit calculation on low settlement offers changes. That is part of how we build leverage for injured workers — not by shouting, but by building a documented record of every violation, every missed deadline, and every unreasonable denial, then presenting that record to the WCAB.
What to do: You cannot self-report a §5814 violation and collect the penalty. The penalty is awarded by the WCAB — typically on a petition filed by your attorney as part of your case proceedings. If the signs in this article describe what has happened to you, a free case review with a workers' comp attorney is the first step toward quantifying that exposure.
What Bad Faith Looks Like in Practice
Bad faith is rarely a single dramatic act. It's a pattern — missed UR deadlines stacked on top of lost paperwork, on top of an adjuster who stopped returning calls, on top of a TD check that stopped arriving. Each piece looks like a bureaucratic delay. Together they describe a strategy.
California's workers' comp system does not use the traditional tort theory of "insurance bad faith" that applies in other contexts — the insurer's conduct is regulated through the WCAB and the DIR, not through a separate bad-faith lawsuit. But the WCAB has real remedies: §5814 penalties, interest on delayed payments, and attorneys' fees in certain circumstances. Those remedies exist because the legislature recognized that injured workers are in a vulnerable position and insurers have financial incentives to delay.
If you've seen two or more of the signs in this article, the pattern deserves attention.
Frequently Asked Questions
Can a workers' comp insurer act in bad faith?
Yes. California workers' comp insurers can engage in conduct that constitutes bad faith — unreasonably delaying treatment authorizations, cutting off TD benefits without notice, ignoring QME findings, and stalling claims with lost paperwork. Because California workers' comp is a no-fault administrative system, "bad faith" is addressed through WCAB penalties under Cal. Lab. Code §5814 and related statutes rather than through a traditional bad-faith tort lawsuit. The remedies are real: up to 25% of the delayed benefit per violation, capped at $10,000.
What is a §5814 penalty?
A §5814 penalty is a financial sanction the WCAB can impose on an insurer that unreasonably delays or refuses to pay any workers' comp benefit owed. The penalty is up to 25% of the amount of the delayed or denied benefit, with a maximum of $10,000 per violation. The penalty must be awarded by a WCAB judge — it is not automatic and it is not self-reported. Your attorney petitions for it as part of your case.
What do I do if my workers' comp claim is being delayed?
Document everything: every request date, every response (or non-response), every phone call with the adjuster, and every missed deadline. Submit all communications in writing with delivery confirmation. If your treating physician's treatment requests are going unanswered past 5 business days, or your TD payments have stopped without notice, contact a workers' comp attorney immediately. An attorney can file a Declaration of Readiness to Proceed with the WCAB and request an expedited hearing — often the fastest path to getting delayed benefits reinstated and unauthorized denials reversed.
Can the insurer stop my temporary disability benefits at any time?
No. Under Cal. Lab. Code §4650, TD benefits must be paid within 14 days of the insurer's knowledge of your disability and must continue as long as the disability continues — up to 104 weeks within a 5-year period for most injuries under Cal. Lab. Code §4656. The insurer can stop TD only if your treating physician has cleared you to return to full-duty work, if you have reached MMI and your disability status has changed, or if a WCAB order permits it. Stopping payments without one of those bases is a statutory violation.
Does hiring an attorney change how the insurer treats my claim?
In practice, yes. Insurers handle thousands of claims simultaneously and apply more scrutiny — including more documented compliance with UR timelines, TD payment schedules, and QME procedures — when they know an attorney is monitoring the file and prepared to petition for §5814 penalties. That is not a guarantee of any specific outcome, but it is part of why workers represented by attorneys tend to recover more than those who are not.
How do I prove the insurer is acting in bad faith?
Through documentation. Every missed deadline, every written denial without supporting evidence, every stopped TD payment without notice, every QME report the insurer appears to have ignored — these are the building blocks. A workers' comp attorney knows how to compile that record, cross-reference it against the applicable statutory timelines, and present it to a WCAB judge in a way that supports a §5814 penalty petition. You do not need to prove bad faith in a separate court proceeding; the remedy runs through the WCAB.
Is there a deadline to file a workers' comp claim in California?
Yes. Under Cal. Lab. Code §5405, you generally have one year from the date of injury to file an application for adjudication of claim with the WCAB. Separately, you must notify your employer within 30 days of the injury. If the insurer's delays have pushed you close to either deadline, contact an attorney immediately — missing either window can severely limit your rights.
If the pattern described in this article sounds familiar, every day of delay is another day the insurer has the advantage. Call (818) 794-9947 for a free case review. No fee unless we win.
Reviewed by Minas Nordanyan, CA Bar #296806. Last updated June 2026.