Real Experts- Trusted Advice
If your business hires employees in other
states, or performs work in other states, you made need multi-state
The short answer "no". Even though there are insurance companies and agencies that
write and sell insurance in all 50 sates, there are four monopolistic states (ND,
OH, WA, WY) where workers' compensation must be purchased directly from the state.
Ironically, work comp coverage is the only line of insurance where states have these
distinct divisions by state lines. Most employers don't actually need coverage in
every state. It is, however, relatively easy to purchase work comp coverage in all
other other states across the U.S. (except monopolistic).
Most states do have a coverage clause known as an extraterritorial provision.
provision basically allows for the primary state coverage to apply to an injury or
claim when an employee is hurt across state lines. The provision was intended for
situations where an employee is simply passing through a state on business or when
the scope of work is deemed to be temporary. Most states consider temporary to mean
less than 30 days in a period of one year. It is important to note that some states,
like New York, require contractors to have primary coverage in the state if they
perform any work at all.
A workers compensation policy form is made up of six parts. Part One and Part Three
are designed to outline policy coverages available in other states. The confusing
part is they often create ambiguity with regard to what states are actually covered
under the policy. And ultimately, employers are responsible for insuring that they
have adequate coverage despite the confusion.
If your business has employees that cross state lines or travel out of state to
conduct any work, then you should take a look at section 3A and 3C of your workers'
Section 3C can be found under Part Three- Other States Insurance, and is
catch-all statement informing an insured where the policy can extend temporary
coverage. Often times, this is a list of the states where the insurance company is
authorized to provide coverage in that state. Section 3C really means that policy
benefits can comply with state requirements when an employee is injured in that
jurisdiction. This applies to employees injured while working temporarily in those
states. It does not apply to employees who live or consitantly work in the those
Section 3A appears under Part One- Information Page, of a workers'
insurance policy. This section lists the actual states where an employer has
notified the insurance carrier that they need coverage in that state due to
employees living or working there. In other words, states listed in section 3A are
covered as primary states and the carrier is reporting such coverage to the
behalf of the employer. Section 3A is what really matters in order to maintain
compliance with state rules and have ongoing coverage under the policy and the laws
of the states listed.
The vast majority of insurance agents do not have the ability to sell insurance in
more than one or a handful of states. One reason they often can't sell coverage is
because they are not licensed to do business in other states by the Department of
Insurance or other regulatory body. A second reason agents can't offer other
coverage is because they may not be authorized by the insurance
they are appointed with to write insurance outside of one or a few surrounding
It takes a certain level of sophistication and size in order to fully
nuances between states regulations and coverages. Many regional insurance companies
are also limited to fewer than 20 or so states because they are not approved by the
state to sell workers comp coverage in every state.
Workers Compensation Shop.com is a national insurance firm specializing in
multi-state and out of state coverage. We often work with employers when they need
to procure primary coverage in two or more states. Many of our customers are
national and regional franchise owners, medium to large businesses or they are
specialized industries who travel out of state for large jobs and/or have employees
who live and work in several states.
We work with numerous national and regional insurance companies with
regard to workers compensation throughout the United States.
Learn more about Multi-State Workers Compensation
Call One of our Workers' Comp Specialists at 888-611-7467, or
Find your best workers compensation quotes. It takes 3 minutes.
State Fund coverage is also referred to as an Assigned Risk Pool Policy. Employers
are often required to purchase coverage from the Pool when the y are unable to
purchase coverage on the Private Market. State Fund coverage only applies to the
state under which the policy was purchased. Many state's court systems have
determined that State Fund coverage will only pay benefits under the primary state's
State Fund rates are often much higher than the rates from private insurance
companies. Therefore, buying a state fund policy is not the best solution for
business owners. It is not uncommon to run across business owners who have two or
more separate State Fund policies when they do business out of state.
In some circumstances, a State Fund policy might make sense due to the number of
years in business or the nature of high hazard risks. However, employers are
well-advised to always seek to find out-of-state coverage under a single policy
written on the Private Market whenever feasible.