As of today, there still six states that have monopolistic state funds – They are North Dakota, Ohio, Washington, West Virginia, and Wyoming. West Virginia is still in a monopolistic condition as only one carrier, Brickstreet(c) can write Workers Comp business there. That will change on 07/01/08. Please see one of my prior posts on the investigations into the state funds going on in ND and OH.
In these six states, the state governments mandate that employers purchase workers compensation insurance from the state fund. These states don’t even allow insurance companies to sell workers’ compensation to employers headquartered within their borders.
There is a caveat to state funds that most employers do not realize until they receive a surprise claim. Even if your business isn’t domiciled in one of these states, you could still be affected by their laws. If one of your employees is injured in any of these states and decides to file a workers compensation claim, that state’s laws would apply. That is why “employer’s liability” coverage is very important. If you have an employee that is injured in WA and you do not have coverage there or employer’s liability, you will pay for the expenses directly out-of-pocket and may face steep fines from the Insurance Commissioner of that state.
This coverage would pay for related expenses and damages in case you are ever sued for the employment-related injury or illness. Most insurers may offer this extended coverage in these states, but only if you specifically request that they add it to your policy. There are a few Workers Compensation carriers such as The Hartford (c) that add it to all Work Comp policies.
I always recommend in all my presentations that employers make sure they have an “all-states” endorsement to their policies. It does not cost that much and can save an employer’s Workers Comp program from taking a big hit.
Next Up – The Most Expensive Component of all Workers Comp claims, and it is not the medical component. In fact, it never shows up in a file in any place. No really, check it out.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com.