Avoid a BIG Problem NEVER Let Your Workers Comp Policy Expire

If you never let  your worker’s compensation policy expire you can stop reading and move on to a Workers’ Comp Kit Blog of more interest to you, because you never need to think about what to do if it does expire. 

But, let’s just say  for some unknown and/or unusual reason your policy has expired. The first thing to do is read the criteria for selecting a broker at http://tinyurl.com/ylleusu.

Be aware, your insurance agent/broker should have never let this happen. You were also asleep at the switch at the time of this train wreck. Your broker's office should have your renewal on diary, or what’s popularly known as a “tickler” file and it doesn't mean sending you the new premium invoice each year. It’s not a bad idea for you, the employer, to have a “tickler” for such an important business requirement. This is why employers employee administrative assistants.

An excellent broker  contacts you two to three months prior to your work comp policy renewal and discusses with you various topics including any increases or decreases in the number of employees in each job classification and confirms the amount of payroll with you. 

An excellent broker  inquires about any improvements in your safety program, any changes in your return-to- work policy, any changes in your drug testing policy, any changes in your managed care program and if there were any changes in your health and wellness program. 

An excellent broker  uses all this information to be sure you are still getting the best premium rate for your business. 

You, the employer are also responsible for the work comp policy being renewed and never expiring. You know when it’s administrative assistant week, right? Both you and your AA need to list on your calendars the policy renewal date and a date two months prior to renewal to call your broker. During your call you and the broker  review your coverage and the steps to take to lower your exposure to on-the-job injuries? Then, once there is agreement, note on each calendar,  ten to fifteen days prior to the expiration of the policy, a reminder to pay the work comp policy premium.

If yours is a complex  corporation, start the payment process and follow the rules set up by accounting so they get the information in plenty of time to issue the check. Follow up on their process too. Also, make a diary note  to confirm receipt of the new policy and check it over to ensure everything you agreed to or changed is included. Then there will be no surprises when claims are submitted.

So you and  the broker goofed, and the work comp policy expired. With very few exceptions, unless you are a very small company — small being defined as one to five employees in most states –you are in violation of the state statute requiring you to have workers' comp coverage for your company. 

Call your broker  immediately, and request a reinstatement back to the prior policy expiration date. The broker may or may not be able to do reinstate the policy, depending upon his/her influence with the insurer and what your state law requires.

If you are able  to get the policy re-instated back to the prior expiration, pay your premium and wait until you have the new policy in hand for the current year. Review the blog on selecting a broker. Depending on the premium for last year versus the premium for this year, you need to decide to stay with the current policy for the full year, or to find new coverage with a new broker and move your insurance program.

If you are unable  to get the previous policy re-instated and have a gap in your workers’ comp coverage, it is best you notify the senior management of your company of the problem. In most states, if an employee gets hurt and you do not have work comp insurance coverage, your company becomes the insurer by default. That is, your company pays the medical and the lost wages and the permanency. Plus, you are now back into the tort system where the employee has the right to sue you in the local court system. Just hope it is not a catastrophic injury case as the big workers’ comp claims can put a small company out of business. 

If the prior policy  cannot be re-instated, ask the broker which company has the fastest underwriting to get work company coverage for your company. This is not the time to be looking for the best price, you need work comp coverage now. Management needs to make a decision as to whether to continue operations or cease operations until a work comp coverage policy is bound. If you are a high-risk business like dynamite manufacturing, you better put everyone on a paid furlough until the work comp coverage is in force. (workersxzcompxzkit)

Another good reason  to notify management of your oversight of letting the work comp coverage expire is the State Department of Insurance, or the State Industrial Commission will, depending on the State, be sending your company a notice of the amount of fine your company must pay for not having workers' compensation coverage. Most companies do not like paying fines to the State, which is another good reason to always have the work comp policy renewal on your work calendar.