CISR - Commercial Casualty II - Section 1: WCOM & Employers' Liability

Which of the following is not a WCOM monopolistic state? A. North Dakota B. Ohio C. Wyoming D. Texas

Answer: D - Texas

WCOM Information Page - Item 3.A.

Applies to State WCOM laws: triggers WCOM coverage in listed states

What is the Federal Compensation Law?

Certain situations where the US gov't has control over injuries (instead of states) Injury happens in place where US gov't has jurisdiction Ex. Federal property, next to navigable waterways When employers find themselves in these situations, they can purchase WCOM just lie they normally would for their employees, but then it can be endorsed or modified to provide the coverage need for those federal situations The policy is then equipped to respond to state claims for WCOM that may arise or respond to accident claims under a variety of federal laws Ex. Dock workers, rail roads, military bases. Ex. Peter gets injured while dong welding work on a vessel - His company would report the claim to their WCOM carrier - who would adjust the loss under the federal law that applies, rather than the state WCOM law

WCOM Information Page - Item 3

Coverages: indicates the locations and limits that apply to the coverage in the policy. (As well as a list of END's and schedules)

Maritime Coverage Endorsement (WC 00 02 01 A)

Covers employees who are the masters or crew of a vessel

Longshore and Harbor Workers' Compensation Act (LHWCA) Coverage Endorsement (WC 00 01 06 A)

Covers employees who load or unload ships

Foreign Workers' Compensation Coverage Endorsement (not standard)

Covers repatriation expenses of an employee injured overseas

What are the Employee Advantages of WCOM?

Defined benefits if injured on the job Benefits regardless of Negligence Some benefits last a lifetime

What is the Experience Modifier (and it's purpose - WCOM) ?

E-Mod Reflects employers' claims experience, that is, the frequency and severity, or cost, of claims. The E-Mod - a value is normally more or less than 1.0 - which is used to calculate the employers premium An E-mod over 1.00 indicates higher claims payment history than average for those classifications (given a debit modifier) An E-Mod of less than 1.00 indicates the employer has lower claims payments than an average, similar employer (given a credit modifier)

WCOM Information Page - Item 3.B.

EPLI Coverages : limits for EPLI insurance Three limits that apply: BI by accident, each accident BI by disease, policy limit BI by disease, each employee Limit - the most that will be paid for any one accident or loss

WCOM Information Page - Item 2

Effective and Expiration dates

Voluntary Compensation Endorsement (WC 00 03 11 A)

Endorsement used with the Workers Compensation and Employers Liability policy that adds coverage for employees who are excluded from the state's workers compensation law. (Covers employees who are not explicitly covered by the WCOM law)

WCOM Information Page - Item 3.D.

Endorsements/Schedules applicable to the policy

True or False: Employer purchase of WCOM insurance is voluntary in all states but TX and NJ

False

Which part of the WCOM General Section explains the policy's role as an insurance contract?

General Section A

Which part of the WCOM General Section clarifies who is an insured?

General Section B

Which part of the WCOM General Section explains in which states coverage applies?

General Sections D & E

WCOM Information Page - Item 1

Lists the NI, their mailing address, & type of ORG.

What is a Loss of Service Claim?

Made by family of injured Ex. Dependents need care and services an injured parent can no longer provide. Also, a spouse may sue for loss of consortium or harm to the marriage relationship due to injury.

What is a Dual Capacity Claim?

Made by injured employee who incurred an Injury arising out of employers defective products Ex. An employer, such as a ladder producer, acts as the manufacturer of a product that injures an employee while in the course of employment. In this case, the employer serves in two capacities - as employer AND as manufacturer.

What state is an exception state (WCOM) ?

NJ - but is easily compulsory

What are the employer advantages of WCOM?

No lawsuits from injured employees Cost of Insurance is predictable Tangible benefit to employees Note: An employer may face repercussions if they choose not to purchase WCOM insurance. Ex. They can face administrative penalties in their state, and they can be subject to lawsuits from injured employees. Unless an employer purchases WCOM, most states workers' comp laws include language that denies employers the use of important legal arguments when making a defense against an employee lawsuit.

What are the 5 Monopolistic states (WCOM)

OH, OK, ND, WA, WY

Purchasing Options for WCOM benefits

POL from a private carrier POL coverage from a competitive state fund Allowing employers, or groups of employers, to self-insure (not permitted in ND or WY) Purchasing a policy from the monopolistic state fund (ND, OH, WA & WY?) A monopolistic state fund is a state-created/owned/operated WCOM facility. This fund writes all WCOM insurance for the state. The state does not allow private WCOM.

WCOM General Section - Paragraph A

Paragraph A. in the General section explains the policy' role as a contract of insurance between the employer named in Item 1 of the information page and the insurer, also identified on the info page. THE POLICY : This policy includes at its effective date - *the information page and all endorsements and schedules listed there. * It is a contract of insurance between you (the employer named in item 1) and us (the insurer named on the info page). The only agreements relating to this insurance are stated in this policy. The terms of this policy may not be changed or waived except by endorsement issued by us to be part of this policy.

WCOM General Section - Paragraph B

Paragraph B. clarifies who is an insured. An employer is insured if named in Item 1 of the Information page. WHO IS INSURED: You are insured if you are an employer named in item 1 of the info page. If that employer is a partnership, and if you are on if its partners, you are insured, but only in your capacity as an employer of the partnership's employees.

WCOM General Section - Paragraph C

Paragraph C. describes workers' compensation law as "workers' or workmen's compensation law and occupational disease law of each state or territory named in Item 3A of the information page WORKERS COMPENSATION LAW: Workers Compensation Law means the workers or workmen's compensation law and occupational disease law of each state or territory named in item 3A. Of the information page. It includes any amendments to that law which are in effect during the policy period. It does not include any federal workers or workmen's compensation law, any federal occupational disease law or the provisions of any law that provide non-occupational disability benefits.

WCOM General Section - Paragraph D

Paragraph D and E. explain the states and locations in which the Workers' Compensation policy provides coverage. STATE: Explains that "a state" means any state of the US and including the district of Columbia

WCOM General Section - Paragraph E

Paragraph E Specifically identifies the workplace locations in which coverage applies. They are the workplaces listed in Items 1 or 4 of the Info page. It also includes other workplaces in item 3.A. states unless the employer has other insurance or is self-insured for those workplaces. LOCATION: This policy covers all of your workplaces listed in items 1 or 4 of the info page; and it covers all other workplaces in Item 3.A. states unless you have other insurance or are self-insured for such workplaces.

WCOM Information Page - Item 4

Premium Calculations

Which part of the WCOM General Section describes WCOM law?

Section C

Which part of the WCOM General Section identifies workplace locations where coverage applies?

Section E

What states cannot be listed in Item 3.C. of a WCOM policy?

States already listed in 3.A. Monopolistic state (OH, OK, ND, WA, WY) A state where the carrier will not agree to provide coverage

WCOM Information Page - Item 3.C.

States w/o operations/ "Other States' Insurance" - activates coverage for unknown operations that could develop during a POL period in a state not listed. The following states cannot be listed: States already listed in 3.A. Monopolistic state (OH, OK, ND, WA, WY) A state where the carrier will not agree to provide coverage *The policy holder is required to notify the carrier "at once" if they begin work in any state listed in 3C (however, "at once" is not a defined term) Work upon the effective POL date - coverage will not apply unless they report within 30 days at the beginning of the policy year as a grace period

True or False - in a dual capacity claim, an employer is both the employer and the manufacturer of the product that injured an employee during the course of employment

TRUE

True or False - the Care and Loss of services benefits is not one the 4 categories of WCOM benefits

TRUE

What state is Elective (WCOM)?

TX

What is the NCCI?

The National Council on Compensation Insurance (NCCI), is the private bureau that guides most of the regulation and administration of workers' compensation in a majority of states, uses 4 digit class codes to classify exposures or businesses. (Describes the type of work done by the employees) There are national and state levels of classifications - Examples: 9521 - Type of work: Advertising Display Installation Service 5951 - Type of work: Antitoxin, Serum, or Virus Manufacturing and Drivers 9534 - Type of work: Bell Installation - Tower and Drivers

What is Employers' Liability?

The exclusive remedy is a component of WCOM that prevents employees (injured on the job) from making a tort liability claim against their employer * Enshrined in the WCOM law of the states and works for vast majority of these claims The laws do contain certain exceptions that allow the employees to sue (WCOM laws do not apply to all types of employees) There are certain types of situations where employers liability will respond as well as defend and pay on behalf of the employer - even if the employee is making a separate WCOM claim

What are the notification requirements of Item 3.C. - Other States' Coverage for the WCOM policy

The policy holder is required to notify the carrier "at once" if they begin work in any state listed in 3C (however, "at once" is not a defined term) Work upon the effective POL date - coverage will not apply unless they report within 30 days at the beginning of the policy year as a grace period

What are the most common Employers' Liability Claims?

Third Party Action Over Claim Loss of Service Claim Consequential Injury to Others Claim Dual Capacity Claim Other types: Ailment for disease Claim made by officers who aren't' covered by WCOM Some categories of employees that are not covered in certain states (i.e. casual laborers (temporary workers) or farmers can file a liability claim.

What is a Third Party Action over claim?

Third party org sues the employer due to the employees claim against them Ex. An employee is injured by a piece of equipment. The employee sues the manufacturer. The manufacturer (3rd party), files a claim against the employer when it is discovered the employer was aware that the employee removed a safety guard to speed up work or a cleaning process.

What formula is used by the NCCI to help insurance companies charge premiums appropriate to the risks?

Total Annual Payroll/100 X Classification Rate = WCOM Insurance premium

True or False: One advantage of WCOM to employers is predictable costs

True

True or False: State WCOM laws are no-fault systems

True

What is a Consequential Injury to Others Claim?

Typically made by family of injured Ex. a spouse suffers a heart attack upon hearing of an injured employee

What are the medical and disability benefits that are associated with WCOM based on? What are their time limits?

WCOM would pay medical costs for all reasonable injuries, with no time limit. Disability benefits are based on an injured employee's income and are limited to the extent of their disability.

Outer Continental Shelf Lands Act (OCSLA) Endorsement (WC 00 01 09 C)

a federal statute that extends the benefits of the LHWCA to workers engaged in exploring and developing natural resources on the outer continental shelf

Explain what Paragraph C in the general section of the WCOM and Employers' Liability POL does NOT apply to:

does not include any federal workers or workmen's compensation law, any federal occupational disease law or the provisions of any law that provide non-occupational disability benefits.

Monopolistic State Fund

state-created, state-owned, and state-operated Workers' Compensation insurance facility; it writes all WCOM insurance in the state *does not provide EPLI* *These states cannot be listed/designated in the "Other States' Insurance" section (Item 3.C.)

Definition of "Limit"

the most that will be paid for any one accident or loss

WCOM Claims - When they're in another state

they or the employer report the claim to the insurance company If the injury occurs in a state that's not the employee's home state, they can 1. if they've been there a sufficient length of time, the state might recognize the rights of hte employee to make the claim there. 2. if hte WCOM benefits are more generous in the "non-home" state, the employee chooses where to file claim

Stop Gap Endorsement for Employers' Liability Coverage

this is an alternative to the WC 00 03 endorsement - may be added to CGL or BOP

Sole Proprietors, Partners, Officers and Others Coverage Endorsement (WC 00 03 10)

used to include those persons who are excluded by law but elect to be covered (if permitted by the state)

Employers' Liability Coverage Endorsement (WC 00 03 03 C)

used when WCOM coverage has been obtained in a monopolistic state fund. Provides employers' liability coverage only in states where the policy does not provide WCOM insurance (Ex. in Ohio, this END is used)

Medical Benefits (WCOM)

*"Any reasonable and necessary medical treatment related to an injury."* These benefits usually have no dollar amount or time limit

Disability Benefits (WCOM)

*COMPENSATION FOR TYPES OF PERMANENT INJURY & COMPENSATION FOR LOST WAGES* Compensate an injured employee for their temporarily lost wages Typically a % of the normal pay subject to a maximum - due to inability to work. This can vary in length depending upon the state and the employee's physical abilities. Usually a waiting period (Ex. 1 week) before temporary disability benefits are payable ("Income Benefits") Permanent Disability as a result of an injury is also compensable and varies by state. In the case of a lifetime disability (Ex. blindness, deafness, paralysis) payment can extend for the life of the employee.

Death Benefits (WCOM)

*FINANCIAL SUPPORT FOR BENEFICIARIES* Typically include an amount for burial expenses and ongoing support paid to qualifying beneficiaries (i.e. spouse and dependent children). Benefits are usually conditional Ex. should a spouse remarry, or when children reach a given age, benefits may be terminated.

Rehabilitation Benefits (WCOM)

*RESTORATION OF AN EMPLOYEE'S PHYSICAL CAPACITY* Typically include the costs to restore an injured employee's physical capacity and may include vocational rehabilitation costs

Disability benefits - Payments and how they work

1. After the employee is injured, can they keep working? If htey can't the first aspect of disability benefits kicks in Note: thereis a maximum set by state law of what income benefits will be paid 2. Next type is paid when an employee has recovered and impairment is determined by a medical professional - triggering how much employee will receive 3. Last type kicks in due to severity of injury - varies from state to state - usually paid weekly or monthly for many years (or life) and most states outline particular types of injuries for lifetime benefits ***How payments works does not impact how premiums are calculated or how coverage applies***

4 Types of Benefits (WCOM Statutes)

1. Medical Benefits 2. Disability Benefits 3. Rehabilitation Benefits 4. Death Benefits

What are the 6 parts of the General Section in the WCOM & Employers' Liability Insurance Policy?

1. Workers' Comp Insurance 2. Employers' Labiality Insurance 3. Other States' Insurance (focused on later) 4. Your Duties if Injury Occurs 5. Premium 6. Conditions

Both Items 3A and 3C of the WCOM information page list the states that the policy covers. Example the difference between these two items:

3A triggers WCOM for the state(s) listed in which the NI has ongoing operations. 3C - all other states in the US, except those in 3A and monopolistic states, are shown or listed to trigger Other States' coverage for claims that could be made in that state by employees who are there on a temporary basis Ex. 3C a business located only in OK might have listed "all states except: OK, ND, OH, WA, WY"

What are the 8 parts of Part 1 of the WCOM Policy?

A. How this insurance applies B. we will pay C. We will defend D. We will also Pay E. Other Insurance F. Payments you must make G. Recovery from Others H. Statutory Provisions

Rates and payroll are used to determine ____ A. premium B. exposures C. coverage eligibility D. additional POL exclusions

Answer: A

Which of the following coverages is not provided by monopolistic state funds (WCOM)? A. Employers' Liability Insurance B. Rehabilitation Benefits C. Med expenses for work-related injuries D. lost wages due to work-related sickness or injury

Answer: A Employers' Liability Insurance

Most WCOM statutes provide 4 types of benefits. Which of the following is not one of those benefits? A. Medical expenses paid to family members following an employee's sickness B. Payments made towards Physical Rehabilitation following an injury C. Payments made to an employee to replace the loss of income suffered as a result of a work-related injury D. Medical expenses incurred for injuries sustained by an employee

Answer: A Medical expenses paid to family members following an employee's sickness

Which statement best explains what section 3.B. of the WCOM information page triggers and how: A. it triggers employers' liability coverage for those states listed in 3A for the limits that are shown for BI by accident for each accident, BI by disease with a policy limit, and BI by disease for each employee B. it triggers WCOM benefits in the states listed in 3A and sets the limits for med expenses, rehab expenses, and death/funeral expenses C. it triggers Employers' Liability coverage for only those states listed in 3B D. it triggers WCOM and Employers' Liability coverage for all states listed in 3B

Answer: A it triggers employers' liability coverage for those states listed in 3A for the limits that are shown for BI by accident for each accident, BI by disease with a policy limit, and BI by disease for each employee

(WCOM) Classifications in Item 3.A. of the information page have specific rates taht apply to each $100 of ________ A. coverage offered B. employee payroll C. liability exposure D. corporate assets

Answer: B

Frequency and Severity are measures used for accidents in the ________ A. Federally-mandated Job Safety Rate addition Calculation B. NCII Experience Rating Plan C. State-Specific Exclusion Modifier Rating D. Hazard Assessment Rating Modifier

Answer: B

An experience Modifier of greater than 1.00 indicates that an employer has a _____ than average claims payment history among similar employers. A. less consistent B. more consistent C. higher D. lower

Answer: C

Which of the following is not an endorsement that responds to federal compensation laws? A. longshore and Harbor WCOM act coverage END B. Foreign WCOM Coverage END C. Offshore Crew Distress Coverage END D. Employers' Liability Coverage END

Answer: C

Which of the following is not included on the Info page (WCOM)? A. the type of organization B. the policy period C. the policy conditions D. the Coverage provided by the policy

Answer: C

Which of the following statements is not true about WCOM statutes? A. Lost Wage benefits are paid to replace the loss of income suffered by an injured or sick employee B. Most states have rehab benefits written into their law C. most states impose a dollar limit on medical expenses D. Death benefits can include weekly income benefits for the employee's eligible dependents

Answer: C most states impose a dollar limit on medical expenses

___________describes the types of work done by employees in those businesses or ORG's (WCOM) A. state specific job rankings B. The national job EMOD classification Chart C. The SCORE job classification system D. Job Classification codes

Answer: D