Tag Archives: workers comp insurance

Workers comp insurance is protection against claims filed from a worker citing an injury or damage to them due to work. Workers comp insurance are almost necessary with the amount that a small injury could do if the business owner is found liable.

Claims Management, Human Services Practice Group Content, Other, Workers Compensation Insurance

COVID-19 on NYS Workers Compensation

The COVID-19 outbreak has spread all throughout America, but most notably in New York. Considering America’s largest metropolitan hub is New York City, when the disease hit it was bound to be catastrophic. Due to the heavy outbreak in New York, Governor Cuomo ordered a stay-at-home rule for nearly three months. This resulted in higher unemployment and less in-person work happening.

Increase in COVID-19-Related Workers Comp Claims

What exactly does this mean for Workers Compensation claims? It depends on what types of workers comp claims. Considering health care workers and essential first responders are eligible for workers comp, the workers comp claims due to the contraction of coronavirus have been large in quantity and amounts paid out. Coronavirus claims have been costly for insurance carriers per claim for two reasons.

First, the medical bills related to treatment of the virus are hefty: 6 days of hospitalization can cost $40,000. Second, insurance carriers set a high standard for respiratory Workers Comp claims after the 9/11 attacks. Respiratory diseases lime coronavirus can have permanent or long-term impacts, meaning more money out of insurance carriers. And because the coronavirus is a temporary pandemic and is no fault of the employer, premiums can not necessarily increase, meaning greater losses for carriers due to the costly COVID-19 workers comp claims.

Decrease in Non-COVID-19 Related Workers Comp Claims

However, the COVID-19 impact on NYS workers comp does not end there. Because of the lock down, the number of non-COVID-19 workers comp claims has significantly shrunk these past 3 months. So, financially, while the COVID-19 claims are more expensive than regular workers comp claims, the number of COVID-19 claims is still not as large as the average amount of workers comp claims, meaning that both of these effects of the outbreak have offset each other financially.

The question is now whether insureds will protest that due to there being less workers on payroll and claims being filed, WC premiums should decrease, meaning insurance carriers charge less on premiums to pay out almost the same amount of money. It is important to know the outbreak is not over and these figures may change when the pandemic finishes. Keeping up to date with the official NYCIRB and NY officials is the best way to keep track of insurance on workers comp effects from the pandemic.

Still confused? Still have questions? Call a risk advisor today at 914-357-8444 or visit us here at our website.

Note

*All of these statistics and findings were found in a June 2020 report on COVID-19 and Workers Comp claims written by the NYCIRB. The link is mentioned in the article, and can be found here.

Workers Compensation Insurance, Workers Compensation Premium Audits

Should You Excercise The Executive Officer Exclusion On Workers Comp Insurance

With insurance mistakes can be hidden for years until a claim arises. Then the error becomes obvious and expensive. One error we see often is when single owner or dual owned businesses voluntarily elect to trigger the executive officer exclusion on their workers comp insurance.

Most states require employers to purchase a workers compensation insurance policy to cover workers who are injured or made ill due to a workplace exposure. If you are an owner and executive officer of a company AND have only one or two executive officers you may exclude yourselves from coverage. Note however there are potential drawbacks to opting out that need to be seriously considered before you make your decision. Further each state has it’s own rules for when and how an executive officer may exclude themselves from coverage. What rules apply to you are contingent on where your company is domiciled and if you are a multi state risk which would be governed by NCCI. 

Executive officers of a corporation are usually included for coverage under each state’s workers’ compensation laws unless they file for an exclusion from the policy. Partners and sole proprietors are generally exempt from coverage but may elect coverage under the workers compensation policy. For the NY State Statutes CLICK HERE.

Benefits of Workers’ Compensation Insurance for Executive Officers 

The benefits are the same for everyone covered under a commercial workers’ compensation policy, including officers. Workers compensation coverage pays benefits to workers injured on the job. These benefits include medical care, a portion of lost wages and permanent disability. It also provides death benefits to dependents of employees killed from a work-related accident.

A typical health insurance policy specifically excludes work-related injuries unless there is a rider attached to the policy that adds business coverage. Furthermore, health insurance does not cover disability the same way that workers’ compensation insurance does. Most times when we are invited into the business to assess how designed a companies insurance program is built we rarely ever see coordination between the corporate health insurance program and the workers compensation insurance program.  

Why would an Executive Officer Exclusion opt out of workers’ compensation insurance?

Many executive officers and business owners make the following assumptions when opting out of workers’ compensation insurance:

  • They assume that their medical insurance is enough to cover them in the event of an injury incurred at the workplace.
  • They assume that they would never want to file a workers’ compensation claim against their own company, so they don’t see the need to pay premiums for a policy that they won’t use.
  • They think they are saving alot of money off the workers compensation premium by excluding themselves.

Drawbacks for Executives Officers of Opting Out:

Even if an executive officer spends the majority of his or her time at a desk, there is still a risk of injury. And if an injury occurs, it’s likely that the officer’s health insurance policy will have an exclusion for work-related injuries. Without workers’ compensation insurance, the cost of treatment for those injuries would have to be paid for by the company, or come out of the pocket of the executive officer.   

Opting out of workers’ compensation insurance may save  money off the workers compensation premium, but it also transfers risk to the employer and to the corporate officer who chooses to opt out. The risk for injury is greater than you think. Many executive officers travel for work and travel to and from meetings. As an exmple if you are traveling in between meetings and injured in a car accident by a person who has little insurance who will pay your medical benefits and lost wages for recovery? The risk is much greater than most people realize which is why we rarely advise our clients to exclude themselves from workers compensation coverage. 

Lastly there is usually an exclusion in the group health insurance for injuries caused at work which should be covered under workers compensation coverage. Rarely is this exclusion ever cooridnated between your health insurance broker and your workers compensation broker. Ultimately this cost will be absorbed by the executive officer sadly.

Additional Premium Charges

If an executive officer rejects coverage, he or she will most likely have to file a form with the state and/or the insurance provider prior to obtaining coverage for the rest of the company. In absence of this notification, the insurance provider will assume that the officer is electing coverage, and will charge him or her a premium. The premiums for executive officer coverage is usually less than a thousand dollars and has a maximum cap for highly compensated executive officers which differs by state. 

Option to Self-insure

With self-insurance, a company can avoid paying workers’ compensation premiums by serving as its own carrier. The catch is that the company has to agree to post a bond or put money aside to pay for any claims that may occur. Each state has its own self-insurance requirements.

Consult Metropolitan Risk Advisory today by CLICKING HERE  if you have questions with regard to covering an executive officer or any other workers compensation related question. 

Other

New York Workers’ Compensation Insurance

Small business owners with just a few employees naturally hope they’ll never have to deal with a workplace injury, yet in some cases their risk may be higher, particularly if they have few safety procedures in place in their small enterprise. Like many other types of insurance, the cost of New York workers’ compensation can increase when injury claims begin to roll in, so it really can pay to be diligent with workplace safety. Here are some of the areas that can be easily neglected by small business owners.
Lifting injuries
In a small business, people often work above and beyond what might be required of an employee in a larger enterprise. Small business employees often need to be independent and highly competent as there isn’t always help to call on. However, that nature can lead to individuals forgetting to ask for assistance even when it is available and lifting heavy items alone. Lifting injuries are a very common workplace injury. Encourage your employees to ask for assistance and ensure they know how to apply safe lifting techniques.
Repetitive strain injuries
Repetitive activities and poor posture can lead to quite a range of issues with the spine, and also have the capacity to result in pinched nerves and strained tendons. By the time the worker begins to feel the pain, the problem can be well advanced necessitating medical treatment and a period of rest. Could these issues arise in your workplace?
Minimizing the risk of injury to your workers is as important as having your New York workers’ compensation insurance in place.  Call us today if you need a quote for this or any other business insurance.

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