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Big "I" Virtual University Workers Comp Articles
17 “Tests” to Decide: Employee or Independent Contractor
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.
2 Major Trends in Work Injuries and Workers’ Comp
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?
Are You Ready for the Work Comp Audit: Confirming Payrolls Used
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.
Bad Things Happen When Employees Travel to Other States
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.
Bird Flu, Swine Flu, Just the Flu and Pandemics: How Workers’ Compensation Responds
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.
Calculating the Insured’s Lowest Possible Work Comp Mod
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.
Common Workers’ Compensation Forms and Endorsements Descriptions
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.
Coronavirus and Workers’ Compensation
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?
Employees in Work Comp: Two Key Work Comp Questions
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?
Employers’ Liability: A Primer
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.
Even Monkeys Cannot Explain Why Companies Insist on Workers’ Compensation Waivers of Subrogation Endorsements
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.”
Extraterritorial/Reciprocity Statutes by State
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.
Five Work Comp Errors Every Agent Makes
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.
H3N2 Flu and Workers’ Compensation
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.
I Owe How Much? Court Rules WC Insurer Can Charge for Independent Contractors
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.
Key Information for Interpreting the Work Comp Experience Mod Worksheet
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.
Painkillers in Workers’ Compensation
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.
Three Workers’ Compensation Endorsements Every Agent Should Know When to Use
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.
What Injuries are Covered (“Compensable”) Under Workers’ Compensation?
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.
When is an Illness, Sickness or Disease Covered under Workers’ Compensation?
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.
Work Injury Prevention – Remember PADRE!
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.
Workers’ Compensation Glossary
A glossary of workers’ compensation terms.
Workers’ Compensation, COVID-19 and 3.A. States
Workers' compensation is regulated at the state level. Although there are some benefits to this, there are also problems created.
Your Client is Moving its Work Comp to a PEO
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?
Employees vs. Independent Contractors
What distinguishes an employee from an independent contractor? Do IRS guidelines govern this? (Hint: NO!) In this article, we'll take a look at this issue from the standpoint of statutory requirements or case law decisions, including how a couple of states define the criteria used to determine whether a person is an employee or independent contractor.
Insuring Volunteers - Commercial Lines
Many organizations use volunteers to transport kids and senior citizens or provide personal services in homes or medical facilities. How are these uncompensated volunteers treated from a coverage standpoint compared to employees? When it comes to workers compensation, you may be in for a shock.
Looking for Trouble: Finding and Correcting Mod Errors
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.
Monitoring the Mod
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.
More NCCI Experience Mod Q&A
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!
NCCI Experience Mod Q&A
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:
Revising WC Class Codes on Audit
An insured received revised audits from their workers compensation carrier stating that the class codes used on policies three and four years ago were incorrect and the carrier was requesting additional premium. Can the insurer go back over three years from the policy expiration, revise the class codes, and collect premium?
Should Officers Exempt Themselves from Workers Comp Coverage?
Most businesses today are looking for ways to cut expenses in order to bolster the bottom line. The following 'Ask an Expert' question illustrates one tactic being used: 'If an owner of a business excludes himself from WC coverage and he is injured on the job, will his medical insurance respond?'
In general, the CGL policy excludes claims that arise out of employment related injuries. Those claims are generally best covered by workers compensation and employers liability coverages. However, a fairly common type of claim arises out of third-party-over actions and coverage–under CGL, WC and/or EL policies–can depend on several factors. In this article, we'll examine this often confusing issue.
Three Quick Analyses of an NCCI Mod Worksheet
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.
Workers Compensation and Illegal Immigrants
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.
Workers Compensation Experience Mods and Ownership Changes
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.
Workers Compensation Experience Mods and Reserves
An insured loss was set up with a reserve of $550,000 over three years ago. It was settled this year for only $5,800; however, the insured has been living with this $500K reserve in his experience mod for over two years. Now that this huge reserve has has been paid at only a penny per reserve dollar, can he get his new mod and past mods reduced with a return of premium?