Workers Compensation for Out-of-State Work
Do you perform work outside of the state you’re domiciled in? If so, it’s important to ensure you have Workers Compensation coverage for any state that you will be working in.
Workers Compensation is meant to provide benefits to workers injured in a work-related incident for lost wages, medical expenses, and possibly benefits to dependents if the worker dies from the work-related incident. Each state has its own Workers Compensation program.
For the majority of states in the US, you can purchase Workers Compensation insurance from an insurance company. However, the states of Ohio, North Dakota, Washington, and Wyoming are what’s referred to as “Monopolistic States.” This means that to obtain workers compensation insurance in those four states, you are required to purchase the coverage from the state fund.
If you are performing work in a monopolistic state, make sure to let your agent know. The Workers Compensation coverage provided by the state fund of a monopolistic state does not include Employers Liability, sometimes called “Stop Gap.” If you, the business owner, are sued in relation to an employee’s work-related injury, Employers Liability may help cover the expense related to that lawsuit. Because this coverage isn’t included in the monopolistic state’s workers compensation coverage, you’ll likely need to add it to your General Liability policy.
If a work-related injury occurs out-of-state, the employee can claim workers compensation benefits in the state where the injury occurred. But if you don’t have workers compensation coverage in that state, it can become very costly. Not only will you have no coverage for that state, but you may be subject to hefty fines or even felony charges. Take the state of Illinois, for example:
“An employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. Corporate officers can be held personally liable if the company fails to pay the penalty… In addition, corporate officers who are found to have negligently failed to obtain insurance are guilty of a Class A misdemeanor; if they are found to have knowingly failed to obtain insurance, they are guilty of a Class 4 felony.” (Illinois Workers’ Compensation Commission)
As a business owner, you make decisions each day that ensure the success of your business and the well-being of the people that work for you. Ensuring you have workers compensation coverage for the states that you perform work in is an easy decision toward protecting your business. Give your agent a call today to inform them of future projects out-of-state so your insurance coverage can be updated.