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Monopolistic Workers Comp States Examined Further

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Monopolistic Workers Comp State Funds – Six Remaining

Does the monopolistic Workers Comp state funds show any problems?  As of today, there still six states that have monopolistic state funds – They are North Dakota, Ohio, Washington, West Virginia, and Wyoming.

Hands Presenting Banking Funds Monopolistic Workers Comp Concept
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West Virginia is still in a monopolistic condition as only one carrier, Brickstreet(c) can write Workers Comp business there. That will change on 07/01/08. Please see one of my prior posts on the investigations into the state funds going on in ND and OH.

In these six states, the state governments mandate that employers purchase workers compensation insurance from the state fund. These states don’t even allow insurance companies to sell workers’ compensation to employers headquartered within their borders.

Vector Graphic of Green Dollar Signs Monopolistic Workers Comp State Funds
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There is a caveat to state funds that most employers do not realize until they receive a surprising claim. Even if your business isn’t domiciled in one of these states, you could still be affected by their laws. If one of your employees is injured in any of these states and decides to file a workers compensation claim, that state’s laws would apply. That is why “employer’s liability” coverage is very important. If you have an employee that is injured in WA and you do not have coverage there or employer’s liability, you will pay for the expenses directly out-of-pocket and may face steep fines from the Insurance Commissioner of that state.

This coverage would pay for related expenses and damages in case you are ever sued for the employment-related injury or illness. Most insurers may offer this extended coverage in these states, but only if you specifically request that they add it to your policy. There are a few Workers Compensation carriers such as The Hartford (c) that add it to all Work Comp policies.

I always recommend in all my presentations that employers make sure they have an “all-states” endorsement to their policies. It does not cost that much and can save an employer’s Workers Comp program from taking a big hit.

Next Up – The Most Expensive Component of all Workers Comp claims, and it is not the medical component. In fact, it never shows up in a file in any place. No really, check it out.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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