WORKER'S COMPENSATION INSURANCE

Do you perform work or conduct sales activities in more than one state?  Changes by the National Council on Compensation Insurance in the way in which the "Other States" provision of Worker's Compensation policies are to be enforced by insurance companies make it essential that all states in which you conduct activities at the inception of each year's Worker's Compensation policy be listed in the policy.

Do you have locations in (or have employees who reside and work in) Nevada, North Dakota, Ohio, Washington  or Wyoming?  If so you must purchase Worker's Compensation insurance from the monopolistic funds operated by the states.  When you do, however, you are only purchasing coverage for the statutory benefits provided under the Worker's Compensation laws of those states—that is, you are not buying coverage for Employer's Liability suits as would normally be a part of a Worker's Compensation policy from a private insurer.  Therefore, to protect against this exposure (and to comply with the requirements of an Umbrella Liability policy), you should have "Stop Gap" Employer's Liability coverage added to your program.

Do you have locations in (or have employees who reside and work in) California, Hawaii, New Jersey, New York, Puerto Rico or Rhode Island?  If so, you are obligated to provide Disability insurance benefits for your employees there.  In some states, this coverage is automatically provided by the State and, in other states, it is available from private insurers. 

Do your employees ever go aboard boats in the course of their work for you?  If so and should they become injured, normal Worker's Compensation benefits are replaced by far more substantial U.S. Longshoremen's & Harborworker's Act benefits.  If this exposure exists, call us and we will try to secure U.S. Longshoremen's & Harborworker's Act coverage for you. 

Is your business a Sole Proprietorship or Partnership? Sole Proprietors and Partners are not eligible for benefits under the Worker’s Compensation statutes of Maryland.  Because many health insurance policies exclude coverage for work-related injuries or illnesses, we strongly recommend that Sole Proprietors and Partners elect to bring themselves under the Worker’s Compensation statutes.  This can be done by filing a simple petition with the Maryland Worker’s Compensation Commission.  Once the petition is approved, we can add the Sole Proprietors or Partner(s) to the Worker’s Compensation policy (please note that merely adding the Sole Proprietors or Partner(s) to the Worker’s Compensation policy without filing the petition does not accomplish effecting coverage). 

Is your business a Close Corporation (to determine whether or not yours is a Close Corporation, you must refer to your Articles of Incorporation and look for a specific statement that it is a Close Corporation), a Professional Service Corporation or a Limited Liability Company?  Officers of Close Corporations, Officers of Professional Service Corporations and Members of Limited Liability Companies are covered for benefits under the Worker’s Compensation statutes of Maryland, but may elect to be excluded from Worker’s Compensation benefits, provided that the person seeking exclusion owns at least 20% of the firm.  This can be done by filing a petition with the Maryland Worker’s Compensation Commission.  Once the petition is approved, the person seeking exclusion can be excluded from the Worker’s Compensation policy (please note that merely excluding the person from the Worker’s Compensation policy without filing the petition does not accomplish eliminating coverage). However, because many health insurance policies exclude coverage for work-related injuries or illnesses, we strongly recommend that such persons not elect to exclude themselves from the Worker’s Compensation statutes.  (NOTE: Officers of Corporations which are not Close Corporations are covered under the Worker’s Compensation statutes of Maryland and may not elect to exclude themselves from the statutes.) 

The Worker’s Compensation Law of Pennsylvania was changed to provide for a 5% premium credit for firms who form Safety Committees in accordance with the requirements of the Law.  This applies to businesses domiciled in Pennsylvania and to other businesses which have Pennsylvania exposures under their Worker’s Compensation policies.  If you are eligible for this credit, please contact us and we will provide you with materials describing the criteria and the process for applying for the premium credit. 

In June, 1998, the New Jersey Supreme Court ruled that a lawsuit by an employee suing the employer for Sexual Harassment resulting in Bodily Injury would be covered under the Employer’s Liability section of the employer’s Worker’s Compensation policy.  It is possible that this finding will be “exported” as a precedent to other states.  Therefore, we recommend that, should you ever be sued for any form of workplace harassment or other employment-related tort, you be certain that the claim is submitted to your Worker’s Compensation insurer (even if you also have specific Employment Practices Liability insurance).  

Does your firm engage Leased Employees (defined as people leased to you by an Employment Leasing firm)?  If so, you should be aware that, in the absence of a valid contract with the Lessor to the contrary, the law holds such Leased Employees to be your employees for Worker’s Compensation purposes.  If, under the terms of the contract with the Lessor, the Lessor is deemed to be the employer of record and responsible for Worker’s Compensation benefits, there may still be exposure for you under your General Liability insurance (see that section above).  If your firm engages Leased Employees, please contact us so that we can be certain that your Worker’s Compensation and General Liability insurance coverages are configured correctly.