Workers Compensation for Contractors

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The realm of workers compensation (WC) is constantly evolving. Therefore, changes in state workers compensation and federal workers compensation laws have profound affects on the insurance line. Additionally, lawsuits related to employee injuries continue to grow. Lastly, since this is the most costly property and casualty insurance coverage for most contractors, the insurance products and methods of handling this risk have evolved and grown accordingly. This course is designed to provide detailed information on workers compensation and employers liability insurance. It begins with an introduction to workers compensation, explaining how the law has evolved from the first state act in 1902 to its current status today. Today's state WC laws are examined, including who is covered and under what circumstances. Next is the workers compensation policy itself. Since this is the form used in the majority of states, the focus is on the 1984 National Council on Compensation Insurance (NCCI) policy as revised in 1992. The various parts of the policy are explained in detail. Chapter 3 deals with endorsements to the workers compensation policy, including federal, maritime, premium, and miscellaneous endorsements. Federal Acts are discussed in Chapter 4, focusing on the insurance coverage aspects. The Longshore and Harbor Workers Compensation Act is discussed at length, and other federal workers compensation and employers liability laws are examined as well. There is an overview of the workers compensation marketplace—the various ways workers compensation insurance is purchased in the states and alternatives to insurance (Chapter 5). Rating WC risks is the subject of Chapter 6. The exposure base and methods of classification are discussed, as is how to calculate estimated annual premium. Numerical examples are provided. Guaranteed cost insurance, often the only option for smaller contractors, is outlined in Chapter 7. Retrospective rating programs (called "retros") are discussed in the following chapter, and deductible plans are addressed in Chapter 9. Chapter 10 goes through the various steps of the Workers Compensation experience rating process, how to determine the experience rating period, and eligibility. The effects of ownership changes and how they affect modifiers, and the importance of unit statistical cards and their role in the promulgation of experience modifiers are discussed. Example worksheets are provided. Because the application of workers compensation is tied to state laws, this course frequently refers to the laws of specific states to illustrate how they differ from each other. When studying this course, it is not necessary to memorize the specifics of the state laws. Additionally, while the various charts illustrating the differences in state laws were up-to-date when this course was first published, they may now be out of date. Since they are for illustration only, no attempt is made to update these charts between editions of this text and they should not be relied upon. There are seven learning objectives for the individual taking this course.

1. To understand the federal and state workers compensation laws and requirements.
2. To realize how the workers compensation and employers liability policy works, and the effect of endorsements on basic coverage.
3. To learn the different types of workers compensation insurance markets and alternatives to insurance.
4. To have a basic understanding of how workers compensation insurance premiums are computed
5. To discover how WC guaranteed cost programs, retrospective rating programs, and deductible plans operate.
6. To understand the ins and outs of workers compensation experience rating.