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Employee Had Accident In State With No Coverage

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Conundrum – Accident In State With No Coverage

An employee has an Accident In State with no coverage under the workers comp policy (uh-oh).  Yesterday, we had a case of an employer in a non-coverage conundrum due to an employee being injured out-of-state. Would the AZ Workers Comp carrier pay on an accident that occurred in UT? Would the employer have to pay out-of-pocket for this claim? Would the state of UT fine the employer for no coverage?

Sign Of No Coverage Accident In State Graphic
123RF

The one variable that I did not mention last time is the employee was a sub-contractor. He was covered under the policy as his payroll was specifically listed in the policy. A claim was filed against the carrier for UT benefits. Of course, the carrier denied the claim as there was no coverage for the employee in UT.

What about true path coverage? The employee was not in the course and scope (as I advised) due to wandering off the true path to get back home. The alleged shortcut through UT was not any shorter.

The employee finally admitted he had decided to stop by a remote store to pick up a renowned dessert his family liked that was only made by the store.

The employee subsequently withdrew his claim in UT and filed the claim in AZ. Would the AZ carrier deny due to jurisdiction? Would the employee try to sue the employer directly for no coverage?

The WALSH test and the fact the sub-contractor’s payroll was specifically listed on the employer’s AZ payroll was what I thought was strong enough evidence for the carrier to pay the claim.

The adjuster balked at first, but then the tried-and-true WALSH test saved the day. With the Worked,

Picture Man Hitting His Thumb with a Hammer Accident In State No Coverage
StockUnlimited

Lived, Salaried and Hired part of the sub-contract being all in AZ, only the Accident part of the WALSH test was in UT.

The final resolution was the claim was paid for by the carrier with AZ-based benefits. The injured employee had to wait two months to receive benefits. He is now back driving for the same employer.

Bottom Line – just because an employee is injured in a certain state does not mean that is the state of jurisdiction. Trucking and transportation companies face this type of situation very often.

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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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