Specialty Workers Comp Insurance

Specialty Workers Compensation Insurance is a type of insurance that is designed specifically for businesses that operate in niche industries or have unique employee classifications. These businesses often have specific risk exposures that traditional workers comp insurance policies may not fully cover, making specialty workers comp insurance a vital component of their risk management strategy.

One of the main differences between traditional workers comp insurance and specialty workers comp insurance is the level of coverage provided. Traditional workers comp policies typically provide coverage for medical expenses and lost wages resulting from a work-related injury or illness, but specialty workers comp policies may offer additional coverage for things like equipment damage, regulatory fines, and other unique risks specific to the industry.

For example, a construction company may require coverage for equipment damage caused by an employee, while a healthcare organization may need coverage for regulatory fines related to HIPAA violations. Specialty workers comp policies can be tailored to meet these specific needs, providing a more comprehensive level of protection for the business.

Another key benefit of specialty workers comp insurance is the expertise provided by the insurance carrier. Specialty workers comp insurance providers have a deep understanding of the risks and exposures specific to the industry they serve. They can work with the business to develop a customized policy that addresses these risks and provides the appropriate level of coverage. This level of expertise and customization can help to ensure that the business is protected against all potential loss scenarios.

Another advantage of specialty workers comp insurance is the ability to purchase coverage on a claims-made basis. This means that the policy covers claims made during the policy period, regardless of when the incident occurred. This type of coverage can be beneficial for businesses that may have a high risk of latent injuries, such as repetitive motion injuries.

In addition, specialty workers comp insurance providers may also offer services like loss control and safety training to help businesses minimize the likelihood of accidents and injuries in the workplace. These services can help to reduce the number of claims made under the policy, which can help to keep premiums low.

In conclusion, specialty workers comp insurance is an important consideration for businesses operating in niche industries or with unique employee classifications. It provides a higher level of coverage than traditional workers comp insurance, and is tailored to the specific needs of the industry.

Specialty workers comp insurance providers have a deep understanding of the risks and exposures specific to the industry, and can work with the business to develop a customized policy that provides the appropriate level of coverage. This level of expertise and customization can help to ensure that the business is protected against all potential loss scenarios.

The standard workers compensation policy consists of two coverages. Coverage A provides the state-mandated Workers Comp coverage. Coverage B is Employers Liability which provides coverage for worker injury liability situations not covered by Coverage A.

The four states where workers compensation must be purchased through a state fund do not provide Coverage B so it must be purchased from another market. The coverage is provided by adding an endorsement to a Commercial General Liability coverage form or policy.

If the business operates in multiple states, coverage can be provided by endorsement to the non-monopolistic state workers compensation coverage. Some carriers offer this coverage on a stand-alone basis.

Horse owners ride for pleasure, show, or competition. Personal lines homeowners coverage provides some coverage but often not enough for serious riders. Equestrian risks liability policies are available to bridge the gap in coverage.

Workers compensation coverage may also be needed to cover persons employed part-time, temporarily, or on a limited-help basis to assist in boarding, training stables, racing, or other equestrian-related activities. These underwriters handle this class of business:

Employers liability for maritime risks usually falls under the jurisdiction of either the United States Longshore and Harbor Workers Comp Act (USL&HWCA) or admiralty jurisdiction via the Jones Act.

Coverage for workers involved in offshore oil drilling, marine diving or dredging, employed on fishing vessels, or serving as crew members on tugs, barges, ferries, scows, work boats, and pleasure yachts can be difficult to place because the work they perform is dangerous. Certain specialists well acquainted with maritime exposures provide excess maritime employers liability.

Hazardous industries tend to have severity issues as opposed to frequency issues. This makes them more difficult to underwrite profitably. Effective management and proactive loss prevention are the keys to successfully writing these risks.

Examples of industries that fall into this category are logging, trucking, agribusiness, oil and gas, maritime, and many types of manufacturing and construction operations.

Self-insured retention (SIR) programs allow insureds to retain more control of their assets. While certain programs may have low retention levels, most exceed $100,000. The SIR amount often increases as the program matures due to effective asset planning.

The insured is responsible for all claims within the SIR. Most insureds choose a third-party administrator (TPA) to handle those claims. A number of large insurers and brokerage firms provide TPA services for their accounts on either a fee basis or as part of a total risk management services program.

Advantages of SIRs include reductions in insurance costs, use of the cash flow until a loss actually occurs, at which time the insured sets up a reserve fund to pay losses instead of the insurer paying, and better control of loss prevention.

SIR programs are customized for each insured. Coverages that SIR programs often include are workers compensation, auto liability, and commercial general liability.

Stop loss excess aggregate programs are similar to self-insured retention (SIR) programs because they both allow an insured to retain more control of its assets. While a traditional SIR program pays excess of specific loss amounts, the stop loss excess aggregate pays in excess of a set aggregate that applies over all losses.

This allows the insured to have more certainty on the maximum loss amount for which it will be responsible in a given policy period. Most insureds choose a third-party administrator (TPA) to handle claims. A number of large insurers and brokerage firms provide TPA services for their accounts on either a fee basis or as part of a total risk management services program

The advantage of using an SIR is a reduction in insurance costs, use of the cash flow until a loss actually occurs at which time the insured sets up a reserve fund to pay losses instead of the insurer paying, and better control of loss prevention.

The insured's primary concern is the unlimited exposure that can be resolved with the stop loss excess aggregate method. Coverages often include workers compensation, auto liability, and commercial general liability.

This coverage is sold through trucking companies and covers the owners/operators who contract with them. The trucking company passes the premiums on to the insured truckers. Certain states require that trucking companies provide workers compensation for their contracted drivers and the carriers that provide the occupational accident coverage may provide that mandatory coverage.

Federal workers compensation law applies to maritime employees who work on or over navigable waters that are in or adjacent to the United States. The Act specifically excludes sailors, seamen, masters, and crews of any ship, vessel, or watercraft because they are eligible for coverage under the Jones Act and the Merchant Marine Act.

The workers subject to these Acts are also not eligible for state workers compensation benefits because they work on or over navigable waters. The USL&HWC fills this gap.

Workers compensation insurance is based on a system of state laws that require employers to provide medical care, disability benefits, and lost wages to employees injured or disabled in the course of their employment.

This coverage is an important part of any self-insured workers compensation program. The insured first must qualify as a self-insurer and then post the required bond with the state industrial commission.

Because loss experience can be unpredictable, the insured purchases excess insurance that triggers above a specified retention level. The excess insurance carrier pays losses above the insured's retention up to an agreed amount. The excess carrier may also offer additional services to the insured, such as claims handling, loss control, and various record keeping services.

Special bonds are required of organizations that choose to self-insure their workers compensation exposures. They must apply to the state's Workers Comp Board, register to be a self-insurer, and post a bond that guarantees that claims will be paid.

Following are some examples of specialty Workers Comp coverage and claims:

1. Long-term Disability Claims: A worker may suffer an injury or illness that necessitates a long period of recovery, possibly even lifelong disability. Regular workers' comp insurance might cover immediate medical bills and a portion of lost wages, but a long-term disability might exceed the coverage limit. Specialty Workers' Comp insurance can help in such situations by providing more extensive coverage, including rehabilitation services, ongoing care, and financial support for the worker's family. This can protect the company from a potential lawsuit seeking additional compensation for long-term care.

2. Occupational Disease Claims: Workers in certain industries are exposed to hazardous substances that can lead to occupational diseases, like asbestosis in construction or black lung in coal mining. These conditions may develop over time and may not be covered by standard workers' comp insurance. Specialty Workers' Comp insurance, however, can provide coverage for such occupational diseases, enabling companies to settle potential lawsuits seeking compensation for long-term health issues.

3. Repetitive Stress Injury Claims: Repetitive stress injuries (RSIs) such as carpal tunnel syndrome or tendonitis are common in jobs requiring repetitive motions. These injuries often develop over time, and proving them work-related can be complex. Specialty Workers' Comp insurance can cover these types of injuries, providing for medical treatment and compensation for lost wages, thereby helping the company handle potential lawsuits related to RSIs.

4. PTSD and Mental Health Claims: Certain jobs, such as first responders and healthcare professionals, can expose workers to traumatic events leading to post-traumatic stress disorder (PTSD) or other mental health issues. Standard workers' comp may not cover mental health conditions that are not accompanied by physical injuries. However, Specialty Workers' Comp insurance can cover such conditions, helping the company handle lawsuits seeking compensation for mental health treatments and therapies.

5. Death Benefits Claims: In the unfortunate event of a worker's death due to a work-related accident or illness, the family may file a claim for death benefits. Regular workers' comp insurance provides a certain level of death benefits, but it might not be enough to cover the family's financial needs. Specialty Workers' Comp insurance can provide enhanced death benefits, thereby preventing potential lawsuits from the deceased worker's family seeking additional compensation.