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Workers Comp Subcontractors Jurisdiction Question

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Workers Comp Subcontractors Jurisdiction

The Jurisdiction of Workers Comp subcontractors WC coverage. A question asked by a peer always draws my attention.  I received this question from one of my peers in the Workers Comp world.

Inspecting Workers Comp Subcontractors list
Wikimedia Commons – Amanda Bicknell

A client of ours uses subcontractors as a part of their construction contracts. The subcontractors have provided valid certificates on insurance for Workers Comp coverage for any of their employees. The subcontractors sometimes cross state lines into another state to take materials to a landfill and to pick up materials.

The premium auditor has billed the client for a large sum of $ as they have said that part of the job involves another state that is not on the certificates of insurance. Can the carrier charge the client premium for their subcontractors as they are operating out of state for part of their job? Who would have the responsibility if a claim was filed in the other state if there was an injury?

Woman Workers Comp Subcontractors Doing Bills
StockUnlimited

I will answer this in two parts – one today and one tomorrow. There are many variables to examine to see if the premium should be charged to the client or to the subcontractors. If there are no out of state provisions on the certificates of insurance then a premium auditor will charge the main contractor for Workers Compensation insurance in another state. I am not inferring that the auditor would be correct, but one could not fault them for adding in a risk premium.

However, there are many particulars such as in which state the certificates cover and what state are they crossing over into to dump and obtain materials. This is definitely one for a premium review for the employer.

I will address what would likely happen if there was an injury in the non-covered state. Trucking companies have to address this very often. We have to thank Mr. Walsh for the next post.

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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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