If you’ve ever read a standard workers compensation policy you’ll know that it’s only 6 pages long. No! That wasn’t a joke…some folks actually read their insurance policies!Unlike so many other insurance policies, this one appears very simple…but it’s not!
Item 3 A, found on the information page of a standard workers compensation insurance policy, states: “Workers Compensation Insurance: Part One of the policy applies to Workers compensation Law of the States Listed Here:” It’s in Item 3A where you will find the list of states where workers comp coverage under the policy in question will apply. Do not be confused with Item 3C which is Other States Insurance! For primary workers compensation insurance to apply in any state it must be listed in 3A.
The policy goes on to state “If you have work on the effective date of this policy in any state not listed in 3A then coverage will not be provided for that state unless the insurance company is notified within thirty days.” This is pretty common and is the standard wording found in most policies. Some insurance carriers, but not all, provide special endorsements when they write the insurance policy that will extend the notification period to sixty days.
Many insurance agents and company underwriters fail to understand the importance of discovering insured locations and states of operation and the impact they may have on coverage under a standard policy. As an example lets say our insurance company provides workers compensation insurance in twenty four states which include Illinois and Massachusetts. A new client for the insurance company has ongoing operations in Illinois and Massachusetts at the time the workers comp policy was written in Illinois. Item 3A on the policy only lists Illinois and the insurance company was not notified within 30 days of the Massachusetts exposure. Coverage is not afforded in the state of Massachusetts.
So the details found on a workers compensation policy really do matter! Correct information provided at the time the policy is set up will go a long way in avoiding these types of errors. Be sure to visit our website at WorkCompConsultant.com for more information about workers compensation policies and issues.
Hope this helps you out! Thanks
