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Workers' Compensation

The employee decides to take his or her work “on the road” now that they are allowed to work from home – or anywhere. When the employee takes a “workcation” away from their residence, are any workers’ compensation issues created?
Constant debate swirls around the difference between independent contractors and employees. It seems that every contractor wants everyone to believe that everyone on the job site is an independent contractor; but we know that’s not true. Use these 17 “tests” to differentiate between a de facto employee and a true independent contractor.
While the number of compensable lost-time injuries have declined steadily for more than 25 years, work comp rates have not dropped. Why? Could the cost of injuries be to blame?
When the work comp policy expires, it is time for the audit. As every agent knows, work comp premium is generally based on payroll; thus, the two most important questions are: 1) what remuneration is included in the audit; and 2) what remuneration is excluded from the audit? Of the two questions, knowing what payroll is excluded from the audit might be the more important information – as this is where most mistakes are made. This article lists the payroll inclusions and exclusions.
Traveling employees create workers’ compensation coverage nightmares; but many agents are unaware of these travelling landmines until after the injury. The problems arise at the junction of two key concepts: 1) Extraterritoriality and 2) Reciprocity. If these two concepts don’t align, serious coverage implications – including no coverage – can exist.
Threats of specific kinds of flu and pandemics garner heavy media attention. When any disease strain threatens a large geographic area, it gets lots of press as the next pandemic. When these stories begin airing, the question is often asked, “Is ‘the pandemic du jour’ compensable under workers’ compensation?” This article discusses what is required for an illness to be compensable under workers’ compensation.
Once the mystery is removed from the experience mod worksheet, development of the lowest possible experience mod is quite easy. This article shows how to develop the lowest possible mod while at the same time highlighting the fact that achieving this mod may not have the intended result.
Endorsements serve to alter any policy; this is true of workers’ compensation policies. This is a schedule and description of many workers’ compensation forms and endorsements.
What makes an illness an “occupational illness” and compensable under workers’ compensation? More specifically, how does workers’ compensation respond to the latest viral panic, the Coronavirus?
Classifying a worker as either an “employee” or “independent contractor” is problematic for more than just workers’ compensation. In an attempt to minimize the problems and confusion, the Department of Labor has proposed the codification of five tests to help in classifying a particular worker as an employee or independent contractor. Although not necessarily developed for the insurance industry, these tests can be used for workers’ compensation clients.
Workers’ compensation, as a coverage, is simple. A worker gets hurt, the work comp policy pays – theoretically; that’s the simple part. The more complicated areas of workers’ compensation involve the state laws and legal doctrines applicable to workers’ comp. Two key areas of confusion are how many different types of employees are there and how do you decipher who qualifies as an employee?
Agents very rarely experience an employers’ liability claim; but this does not mean this important gap-filling coverage should not be understood. There are employee-related gaps in the commercial general liability (CGL) policy and the workers’ compensation (WC) policy that make this coverage a necessity. This primer allows a much clearer understanding of this important yet neglected coverage.
Why waivers of subrogation are requested is a question that results in blank stares and shoulder shrugs. Risk managers want them because they were in the previous contract their company entered into. Subcontractors further down the food chain request them because somebody else required it as a condition to being awarded the contract. Owners and general contractors insist on them because they feel they are buying protection at some level, perhaps believing it will prevent the employees of subcontractors from suing them for injuries received on the project. Nobody knows why they are required beyond, “We’ve always done it that way.”
Helping your clients manage their workers’ compensation program is easier if you can explain one of the most important concepts in an industrial injury or illness. The term “maximum medical improvement” (MMI) defines that concept. Your adjusters use that phrase or abbreviation frequently, and understanding its importance in the injury process can help your clients better understand why a workers’ compensation injury remains unresolved.
When employees travel, it's important to know the extraterritoriality and reciprocity statutes in the state where that employee is working. This reference document will help you do just that.
Workers’ compensation, from a coverage standpoint, is the simplest coverage to understand and even explain. However, statutes and common laws serve to complicate the initial simplicity of workers’ compensation and complexity breeds errors.
Record flu seasons often garner heavy media attention. When any strain of the flu is in the news, whether it be Swine flu, Bird flu or 2018’s H3N2 strain the question is often asked, “Is flu compensable under workers’ compensation?” This article discusses what is required for an illness to be compensable under workers’ compensation.
The following is an article written by Tennessee Big “I” member (and the very first VU newsletter subscriber) Alan Johnson, CPCU, ARM-P, AIS, AINS about a recent Tennessee Court of Appeals case that ruled that, even if all parties agree that someone is an independent contractor, the GC’s workers compensation insurer can still charge premium for them on the premise that the NCCI policy provides a defense if the independent contractor later sues for employee status. The court ruled that the insurer is entitled to premium for this exposure even though all parties agree that the contractor was not an employee. The court does not address the issue of whether the insurer should be able to charge FULL premium given that the coverage is only for defense and not for statutory benefits. At the end of Alan’s article, we provide more information from our Iowa association related to this issue and how this is more than an isolated problem.
As an insurance agent, you understand that your clients and their organizations face new challenges every day, including keeping workers’ compensation costs down, receiving proper workplace injury reports and improving employee morale. It doesn’t need to be difficult to address these needs. In fact, by simply guiding your clients to the right nurse triage program, you can help them create better workers’ comp results, reducing experience modification factors and strengthening your client relationships.
The National Council on Compensation Insurance’s (NCCI’s) Workers’ Compensation Experience Rating worksheet looks daunting at first. But once all the acronyms, shorthand and calculations are understood – it can be appreciated for the thing of beauty that it really is (OK, maybe that’s a bit of hyperbole). Grab a copy of the X-Mod Worksheet and let’s learn how to interpret it.
Read any insurance trade journal, and you’ll see articles about how agents can “lead with workers compensation insurance.” Savvy insurance agents can increase their business by targeting employers with considerable workers compensation exposures. Often after the sale of the work comp policy, agents don’t stay as involved as they do on other lines of coverage. If you have considered leading with workers compensation coverage, the first step is to ensure you understand the coverage the work comp policy provides. This article highlights the basic coverages under the workers compensation and employers liability policy.
Workers’ compensation coverage responds only to an injury or illness defined as occupational. To be occupational and compensable requires certain tests be satisfied. Three key tests must be satisfied before an injury qualifies as an occupational injury, but what about occupational illnesses? One additional test must be passed before an illness is judged occupational and thus compensable.
On any given day in the United States, perhaps 500,000 injured workers are under treatment for chronic pain; a great majority ingest opioids. There may well be 100,000 injured workers on long-term opioid treatment, some extending over two decades. But the use of opioids seems to be dropping.
No matter the size of your client’s workforce, their management of the organization’s workers’ compensation injuries can be challenging. Every organization struggles to find new ways to reduce the number of injuries (frequency) and decrease the amount paid on claims (severity). Here are some suggestions that you can use in guiding your clients toward improved workers’ compensation claims avoidance and management.
The coming-and-going rule in workers’ compensation claims management can determine whether an adjuster or administrative law judge finds an injury compensable. Because each state drafts its own workers’ compensation laws, there is a great deal of variation in case law depending on where the injury occurred. This article provides an overview of the coming-and-going rule in workers’ compensation claims.
Workers’ compensation is simple, it provides sole remedy protection for the injured worker. The difficulty in work comp arises from state and federal laws and non-traditional employer/employee relationships. This article addresses three workers’ compensation endorsements every agent must understand and know when to use.
When employees travel out of state for work, real work comp coverage gaps can exist; and these gaps could leave the employer without the necessary protection they THOUGHT they purchased when they paid their work comp premiums.
Two key questions are answered in this report - what makes an injury or disease compensable under workers' compensation and who is covered by the work comp policy.
The Oxford Language Dictionary defines a Catch 22 as “A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions. A new West Virginia law that allows employers to voluntarily cover post-traumatic stress disorder in frontline responders is just that – A Catch 22.
Only “occupational” injuries are covered by workers’ compensation. To be “occupational” and thus compensable, the injury must “arise out of and be in the course and scope of employment.” All three distinct tests must all be satisfied for the injury to be compensable.
Like work-related bodily injuries, illnesses, sicknesses and diseases must be considered “occupational” to be covered by the workers’ compensation policy. Before an illness or disease can be considered occupational and thus compensable under workers' compensation two tests must be satisfied: 1) The illness or disease must arise out of and be in the course and scope of the employment; and 2) The illness or disease must arise out of or be caused by conditions “peculiar' to the work.
In a first of its kind case, a wife sues her husband’s employer alleging she contracted COVID from her husband as a result of the employer’s negligence leading to her husband contracting COVID. Confused? Don’t be. This may be the first nationally covered employers’ liability case.
The easy to remember acronym for the five key aspects of reducing the costs of and avoiding work injury is PADRE. Understanding Prevention, Avoidance of lost time, Duration, Relapses, and Economic outcome allow your insureds to improve their work comp experience.
James Moore, workers compensation expert and founder of, recently wrote updated the industry about what he’s seeing on claims loss run reviews. Agents who perform regular loss run reviews with their workers compensation clients add value that not all agents can. Here are the trends.
A recent Rough Notes article, “Workers Compensation: An Oasis in a Dry Desert: An Island in Stormy Seas,” finds that despite COVID concerns, the workers compensation market is still stable. Looking to the future, economic trends could increase the cost of reinsurance, but overall, the outlook for workers compensation is bright.
A glossary of workers’ compensation terms.
Workers' compensation is regulated at the state level. Although there are some benefits to this, there are also problems created.
Workers' compensation, as a coverage, is simple. A worker gets hurt and, theoretically, the work comp policy pays; that's the simple part. The more complicated areas of workers' compensation involve the state laws and legal doctrines applicable to workers' comp.
Your client decides to move its workers’ compensation coverage to a PEO, you need to know the answer to three questions: 1) What does the PEO do for my client? 2) How is my client’s work comp affected? 3) What information about PEOs and WC does my client need?
Sometimes errors in the mod occur, and these errors can cost the employer money through increased premium costs. Therefore it's important to go 'looking for trouble' to know how to identify such errors, and how to get them corrected.
In your agency, I bet it is common practice to review renewals 6-8 months in advance, right? Right! (he says sarcastically)  Well, if the workers compensation is experience rated, there are some things that may need attention that far in advance. Such vigilance may save your insured BIG bucks. Included in this article is a downloadable chart that provides a timeline indicating what and when certain actions should be taken to avoid surprises at renewal time.
Our 'Ask an Expert' service got this question recently: 'I have a customer that has not had a workers comp loss in over 8 years. How do you explain that his mod went from .91 to .93? Also, how is the 'stabilizing value' determined on the mod worksheet and what does it represent?' Take a look at this WC Q&A to find out how mods can increase without an increase in losses...and a lot more!
​​​Numerous questions arrive at the VU about workers compensation modifications. Be sure to use the VU search function to find several articles on this subject, including calculations and correcting errors. Here are two more:
If you are meeting with a prospective client, ask for a copy of his most recent experience rating worksheet. Performing the following quick analyses can give you good insight into the client's operations. Also, if you are reviewing an existing client's renewal, the following three quick analyses will help you stay informed about the client's operations.
One of the few email discussion lists I participate in is a Yahoo! Groups list called 'RiskList.' Recently, the topic of discussion was illegal aliens and workers compensation. Some of issues discussed include whether or not they're covered under workers compensation laws and what kind of impact they may be having on loss experience.
There was a time when a high workers compensation experience mod could be reduced to 1.00 simply be creating a new corporation and transferring ownership to it. Since the new owner had no prior experience, the mod would revert to 1.00, despite the fact that the exact same ownership, management, workers, and processes were in place. That's not possible now and hasn't been for many years under NCCI rules.
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