There can be a great difference between Insurance Carriers, Insurance Companies, State Funds, Assigned Risk Plans, Monopolistic States and Association Programs when it comes to workers compensation insurance, how they provide it and how their individual plans may effect an employer. Many folks lump workers compensation into a pile and basically treat it as a commodity sort of like buying a gallon of milk or gasoline. But the differences should be identified. Let’s talk a little about those differences and the overall workers compensation delivery system.
Workers compensation can be looked at as an injury protection system, one put in place by each individual state, to provide employees injured at work with appropriate medical attention, rehabilitation and lost wage compensation. Of course it can be more complicated than that. There are differences between the states as to the level of benefits an injured worker will receive. There are differences between the states as to the definition of a work place injury. Some states have enacted tough standards to have an injury qualify as work related while others still remain less strict. Some have toughened up their laws and statutes resulting a more pro business environment while others remain a more difficult business environment for insurance providers to provide their services at reasonable costs. All this plays into the mix and ultimately effects how insurance providers look at a state when determining their role in providing workers comp coverage. Remember, workers compensation insurance carriers are in business to make a profit and if they cannot, they will typically avoid providing their services.
Here’s some things to keep in mind:
- Not all workers compensation insurance providers provide coverage in all states. – While there are some insurance companies that provide coverage on a national basis there’s a great deal more who do not. If you are an employer conducting operations in all states this is something that you should know. Be sure your insurance company provides the proper coverage for your workers in other states. If there’s any question about this make sure you talk with your broker or agent, or just contact your company direct.
- Not all policies are the same. – Some companies provide special endorsements to their basic policy that broadens coverage. You may find with some carriers they automatically include endorsements to a policy where others may not. Policy endorsements can either restrict or broaden the scope of a workers compensation policy. Be sure to work with your insurance professional to identify exposures specific to your operations so they may be properly addressed.
- Not all insurance companies are the same. – I’m using the term “providers” in this post as there are a variety of organizations that can provide workers compensation coverage to an employer. Insurance carriers may be restricted as to the states they provide coverage. Typically State Funds only provide coverage for their individual state. Assigned Risk Plans also known as the Pool will only provide coverage for their individual state. Monopolistic State Funds only provide coverage for their individual state. Association Funds or Self Insured Funds write their own rules so be sure to read the agreement you sign if you’ve secured your workers comp coverage from a fund.
While you might find there are a great deal of similarities from one state to another in regards workers compensation benefits for injured workers, you’ll also find there are night and day differences as to how different organizations provide coverage!
Hope this helps you out!