If your business only has a physical location in one state, you might think that’s the only state that needs to be listed on your workers’ compensation policy – but think twice. There are multiple situations in which other states might come into play, and this needs to be reported to the insurer.
Many employees decide to live in one state and work in another. Some of these employees may work remotely. Others may make the daily commute across a state border. Employees may also travel out of state on business. Regardless of the details, when workers cross state lines, there are important workers’ compensation issues to consider.
Workers’ Compensation Insurance Laws
Each state establishes its own workers’ compensation insurance laws, and there may be significant differences from state to state. For example, the answers to the following questions may vary depending on where you are located:
- Which businesses are required to purchase workers’ compensation coverage?
- What coverage limits do businesses need to carry?
- Can employers purchase insurance from a state fund, private carriers or both?
- What benefits is an injured worker entitled to?
- Which causes of injury or illness are compensatable?
- How long do injured workers have to file a claim?
Another key issue is jurisdiction. States establish rules for when an injured worker can file a claim in that state. In some cases, two or more states may have jurisdiction for one claim.
For example, if an employee is injured in one state, but the company is located in another state, the employee may be able to file a claim in either state. This gives the employee an opportunity to pick the state with more attractive rules and benefits – and it means the company had better be ready for a claim filed in either state.
Living in Another State
Some employees may work in one state and live in another, and this can affect which states have jurisdiction for potential workers’ compensation claims.
For example, some employees who live out of state may work from home, meaning that they are also working out of state. This may happen regularly or only occasionally. As the COVID-19 pandemic has shown us, remote work arrangements can also happen unexpectedly and out of necessity.
Traveling to Another State
Another issue can occur when employees travel out of state to attend a meeting or event. For businesses that exist near a state border, this may happen regularly and casually. For other businesses, interstate travel may be less common, and possibly even sudden and unexpected.
Workers’ compensation policies typically include extraterritorial coverage for traveling employees. However, coverage may not be seamless.
According to IA Magazine, one type of problem that can occur involves reciprocity. For example, one state may not accept another state’s extraterritorial coverage. Additionally, one state’s coverage may not satisfy another state’s requirements.
Verify Coverage Now
Don’t wait until an injury occurs. Make sure you have appropriate coverage now. Talk to your agent about the following issues:
- Employees who live out of state
- Employees who do remote work out of state
- Employees who travel out of state for work
- Unexpected travel plans, as soon as they are made
In some cases, multiple states may need to be listed as a primary or secondary state on the workers’ compensation policy. Need assistance? Contact us.