(December 2020)
Some states exempt or exclude certain employee classifications from their workers compensation laws. This does not mean that the employer is not liable if an injury, disease, or death occurs on the job. It just means that the employer is not subject to state workers compensation laws to insure those classes of employees. Farm, ranch, and agricultural employees and domestic employees are the classes most often exempt or excluded.
Related Article: Domestic Workers, Farm Workers, and Workers Compensation Insurance
In states where workers compensation coverage for certain employees is not mandatory, an employer can voluntarily provide coverage for those employees by endorsement. This endorsement brings those employees under the state workers compensation laws for the specific class or classes involved.
Two endorsements are available:
Many employers struggle with covering volunteer workers. These two voluntary compensation endorsements do not cover volunteer workers. These endorsements extend workers compensation benefits to certain classes of paid workers (not volunteers) in states where the laws exempt or exclude them only when the named insured employer consciously decides to do so.
Related Article: Volunteer Workers and Workers Compensation Insurance
This endorsement is added to WC 00 00 00 C–Workers Compensation and Employers Liability Insurance Policy. It extends the statutory coverage and benefits under state workers compensation laws to apply to employees not otherwise subject to them and treats them the same as other covered employees. It provides compensation for bodily injury by accident, disease, or death, subject to certain limitations and conditions.
1. The bodily injury must be to an employee in the classification listed on the endorsement schedule.
2. The bodily injury must result from employment included or incidental to work in a state listed on the endorsement schedule.
3. The bodily injury must occur within the policy's territorial limits. This is the United States of America, its territories or possessions, and Canada. There is also coverage outside this territory if the employee is a United States or Canadian citizen and is temporarily away from those countries.
4. Bodily injury by accident must occur during the policy term.
5. Job conditions must cause or aggravate bodily injury by disease. The last day of exposure to such conditions must occur during the policy term.
The insurance company pays benefits that the workers compensation law listed in the schedule requires. The amounts it pays are paid to only persons entitled by law to receive them.
There are two exclusions. Coverage does not apply to the following:
1. Any obligation a workers compensation law, an occupational disease law, or any similar or related law imposes
2. Bodily injury the named insured employer intentionally causes or aggravates
Injured employees are subject to the following three conditions before they receive their benefits. They must:
1. Release both the named insured employer and the insurance company from all responsibility for the injury or death. This release must be done in writing.
2. Transfer all subrogation rights or rights of recovery from others who might be responsible for the injury or death to the insurance company.
3. Cooperate with the insurance company. These includes doing what is needed to enforce any rights of recovery against others.
Note: The insurance company's duty to pay ends immediately if persons entitled to benefits fail to do any of these. It's obligation to pay also ends immediately if they claim damages for the injury or death from either the named insured employer or the insurance company.
If the insurance company recovers from others, it keeps an amount equal to its recovery expenses and the amount of benefits it paid. It then pays any remaining balances to parties entitled to them. Similarly, if the person who received benefits recovers from others, he or she must reimburse the insurance company for the amount of benefits he or she received.
Part Two, Employers Liability Insurance, applies to bodily injury this endorsement covers as if the state of employment listed on the endorsement schedule was in Item 3.A. on the Information Page.
The endorsement schedule requires the following three entries:
This endorsement is not added to WC 00 00 00 B–Workers Compensation and Employers Liability Insurance Policy. Instead, it is added to homeowners, farmowners, ranchowners, or personal liability policies. It applies to only residence employees, not to any employee engaged in or involved with any type of business venture or farm operation. This endorsement adds coverage for both voluntary compensation and employers liability.
Note: This is more than an endorsement. It is stand alone coverage added to a policy.
This coverage compensates the named insured employer's residence employees for bodily injury by accident or disease they sustain. This is subject to the following limitations and conditions:
1. Bodily injury must arise out of and in the course of the named insured employer's residence worker's employment.
2. Bodily injury must result from employment included or incidental to work in the state of the residence premises or another state listed on the endorsement schedule.
3. Bodily injury by accident must occur during the policy term.
4. Conditions of the residence employee’s job must cause or aggravate bodily injury by disease. The last day of exposure to such conditions must occur during the policy term.
The insurance company pays benefits required of the named insured if it and the residence employees listed on the endorsement schedule are subject to the workers compensation law that applies. It pays only the persons entitled to benefits under the law.
The insurance company does not pay more than its share of covered benefits and costs if other insurance or self-insurance applies to the loss. All shares are equal until the loss is paid, subject to any limits of liability that may apply. If claims payments use up other insurance or self-insurance, all remaining insurance pays in equal shares until the total loss is paid.
There are three exclusions. Coverage does not apply to the following:
1. Bodily injury that arises out of any of the named insured employer's business pursuits
2. Bodily injury the named insured employer intentionally causes or aggravates
3. Any obligation a workers compensation law, an occupational disease law, or any similar or related law imposes
Injured employees are subject to the following three conditions before they receive their benefits. They must:
Note:
The insurance company's duty to pay ends immediately if persons entitled to
benefits fail to do any of these. Its obligation to pay also ends immediately
if they claim damages for the injury or death from either the named insured
employer or the insurance company.
This coverage compensates the named insured employer's residence employees for bodily injury by accident or disease they sustain. This is subject to the following limitations and conditions:
1. Only bodily injury that arises from the named insured’s employment and during the course of that employment as a residence employee is covered.
2. Bodily injury must be due to work from employment that is within in the state of the residence premises or another state listed on the endorsement schedule.
3. The bodily injury that is the result of accident must actually occur during the policy term.
4. The bodily injury that is the result of a disease must be the result of conditions that are within the named insured's employment of that residence employee. The condition can either cause or aggravate the disease. The named insured where an employee's is working when his or her last day of exposure to the conditions takes place is the named insured that must respond. The policy in force at the time that employee is working during the last exposure is that only one that will respond.
The insurance company pays all amounts the named insured must legally pay as damages because of bodily injury to its employees that this insurance covers. Not all damages are covered, though. First, the particular state law must permit recovery. Second, the damages must be from one of the following:
1.
An
employee of the named insured is injured, and that employee makes a claim
against a third party. That third party then pursues actions against the named
insured to recover for that employee’s claim.
2. Care and loss of services
3. Consequential bodily injury to the injured employee’s brother, sister, parent, child, or spouse. This is subject to a requirement that the damages are the direct consequence of a bodily injury incident that arises from and occurs during the course of that employee’s employment by the named insured.
4. Because of bodily injury to the named insured employer's employee that arises out of and in the course of employment when the bodily injury claimed is for the named insured acting in a capacity other than as an employer
There are three exclusions. Coverage does not apply to the following:
1. Bodily injury that arises out of any of the named insured employer's business pursuits
2. Bodily injury the named insured employer intentionally causes or aggravates
3. Any obligation a workers compensation law, an occupational disease law, or any similar or related law imposes
The insurance company does not pay more than its share of covered benefits and costs if other insurance or self-insurance applies to the loss. All shares are equal until the loss is paid, subject to any limits of liability that may apply. If claims payments use up other insurance or self-insurance, all remaining insurance pays in equal shares until the total loss is paid.
The insurance company's liability to pay damages is limited to the following amounts on the endorsement schedule. This is regardless of the number of insureds, suits, or persons who sustain bodily injury:
1. Bodily Injury by Accident–each accident is the most paid for damages because of bodily injury to one or more residence employees that arises out of any one accident. This limit includes damages for death, care, and loss of services.
2. Bodily Injury by Disease–coverage limit is the most paid for damages because of all bodily injury by disease to one or more residence employees.
Bodily Injury by Disease–each employee is the most paid for all damages because of bodily injury by disease to any one such employee. These limits include damages for death, care, and loss of services.
3. The insurance company does not pay any claims for damages after the limits that apply are used up paying claims.
Both Voluntary Compensation Coverage and Employers Liability Coverage are subject to the following policy provisions:
The number of full-time residence employees and the number of part-time residence employees must be entered in the spaces provided on the endorsement schedule. A rate and premium must be assigned to each group. The limits of liability and the state where coverage applies must also be entered in the spaces provided.
Note: The previous edition split resident employees between inservants and outservants.