THE SMALL COST OF A VOLUNTARY COMPENSATION ENDORSEMENT EQUALS HUGE PROTECTION AGAINST LAWSUITS

BY ANNETE D. MARSA, CRIS

All Workers’ Compensation laws exempt some employees from coverage. The exemption might occur due to the number of employees being less than the amount the state requires, or because a class of workers is exempt. But before you start imagining your WC premium going towards new equipment, remember that the Workers’ Compensation laws are designed not only to protect the employee but the employer as well.

Part two of a standard WC policy protects the employer for common law liability or damages other than Workers’ Compensation benefits. Unless your policy is endorsed with a Voluntary Compensation and Employers Liability Coverage endorsement, you may be sued by an exempt employee who is injured while engaging in work-related activities.

This means that the seven dollar an hour summer intern could wind up costing you and your company millions in damages if he is injured on the job. A key point to the endorsement is that the insurer is obliged to pay only after the insured person has released the insured and the insurance company from further responsibility in writing.

Remember at your next insurance review to ask your agent if adding this endorsement would benefit your bottom line.