An employee, even when out of state, is still an employee
Bruce worked for John. Bruce hurt his back. Bruce submitted a claim for workers compensation benefits to Farm Bureau, John’s insurance carrier. Bruce’s claim was denied.
John's workers compensation policy was valid but there was a problem. The named insured and business address were correct and the premium had been paid. The problem was the South Dakota location. It had never been reported to Farm Bureau, even though John purchased it in 1999.
John's main location was in Nebraska and Farm Bureau’s workers compensation policy listed only the Nebraska location. However, Bruce's sole place of employment was at the South Dakota location. This was why Farm Bureau denied Bruce’s claim.
The appeals court disagreed with Farm Bureau because the Nebraska Workers Compensation Act required coverage for all employees subject to it, despite what was listed on the declarations.
Do you know about every operation each of your clients engages in?
The big question in this case was how a location went unnoticed for five years, especially considering that it was an actual, physical location that had multiple employees. Was this a case where the coverage simply renewed every year "as is," without any questions being asked? If something this large was overlooked, imagine what else may have been? Lost commission revenue and missed opportunities to maintain and improve the insurance program are just two possible issues that come to mind. There are certainly others.
The Commercial Lines Risk Evaluation is a tool you can use with new customers, but it can also be used on your renewals. Did you know that it can be cut and pasted into a word document and modified to suit your purposes?
The ACORD Workers Compensation application form was updated in 2007. Many other ACORD applications are updated every year. Have you considered using them to work with your clients to update their information? It might help you identify new locations and new exposures, as well as enhance and strengthen your relationships with them. In tough economic times, many entrepreneurs acquire new operations, end others, and expand into new areas in order to stay in business. A new set of ACORD applications may help you identify those changes and increase your revenue.
PF&M has a new section called Practical Tips and Information. Most of this information was previously located elsewhere in PF&M but is now all in one easy-to-find location.
Alternative Risk Transfer and Risk Management
Definitions and Interpretations
Glossaries
Guaranty Funds
Miscellaneous
National Flood Insurance Program
Sales Letters
Terrorism
Wrap-Ups
Feedback
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to add to the Producer's Commercial Lines Risk Evaluation System or a subject that you would like to see covered in PF&M? Contact us now.
