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Chapter 6: endorsements.

There are many endorsements authorized for use with the workers compensation and employers liability insurance policy. This chapter lists some of them and analyzes their content. It should be noted that there are state-specific endorsements that are applicable only in that particular state named in the endorsement that bring the policy into conformity with state law or regulation; but, those are too numerous to discuss in this guide. And, there are endorsements that pertain to federal laws on the subject of workers compensation, such as the maritime coverage endorsement and the federal employers liability coverage endorsement. These are discussed in a later chapter.

The endorsements in this chapter are presented in numerical order.

Alternate Employer Endorsement WC 00 03 01 A

This endorsement applies only with respect to bodily injury to the named insured's employees who are in the course of special or temporary employment by the alternate employer listed on the endorsement. An example of when this endorsement can be used is the following: a supplier of temporary office help (the insured) is required by its customer (the user of the temporary office help, that is, the alternate employer) to provide this insurance to protect the customer from claims brought by the insured's employees against the alternate employer. If the named insured has an employee who is injured while working for the alternate employer listed on the endorsement, WC 00 03 01 A will provide coverage for claims made by the employee against that alternate employer. Of course, the insurance afforded by the endorsement is not intended to satisfy the alternate employer's duty to secure its own obligations under the workers compensation law of the state.

Employers Liability Coverage Endorsement WC 00 03 03 B

This endorsement is usually used in monopolistic states where the workers compensation system is not open to coverage by private insurance companies. WC 00 03 03 B states up front that part one of the workers compensation policy--workers compensation insurance--does not apply to work in a state shown in the schedule. On the other hand, part two--employers liability insurance--applies to work in the listed states as though the states were shown in Item 3.A. of the information page. Basically, WC 00 03 03 B provides stop gap coverage for employers in those states where the state runs the workers compensation program but does not offer employers liability coverage. Note that in Ohio, endorsement WC 34 03 01 B is used in place of WC 00 03 03 B.

Joint Venture as Insured Endorsement WC 00 03 05

WC 00 03 05 is fairly straightforward. It states, "If the employer named in Item 1 of the information page is a joint venture, and if you are one of its members, you are insured, but only in your capacity as an employer of the joint venture's employees." The workers compensation policy makes no mention of business arrangements such as joint ventures, but, joint ventures can, of course, be employers. This endorsement makes the point that the insurance afforded by the workers compensation policy is limited to being an employer of those employees that are working for the joint venture. If an employer is involved in a joint venture but also has other business interests and operations, he will need a separate workers compensation policy to apply to injuries suffered by those employees working in the other businesses and operations; WC 00 03 05 will not respond to such claims.

Medical Benefits Exclusion Endorsement WC 00 03 06

Some states permit insureds to pay medical benefits directly, instead of channeling them through the workers compensation policy. Endorsement WC 00 03 06 is attached in such situations. It states that workers compensation medical benefits of a state listed on the endorsement are not covered. The endorsement directs that the insured pay medical benefits as required by law and to the satisfaction of the insurer.

Medical Benefits Reimbursement Endorsement WC 00 03 07

This endorsement is similar to WC 00 03 06, discussed previously. It states that the insured will provide medical benefits as required by law in the states listed. The insurer also must be satisfied with the way in which benefits are being paid. In addition, the insured is obligated to reimburse the insurer for any medical benefits that it may legally be required to pay.

Partners, Officers and Others Exclusion Endorsement WC 00 03 08

Some states allow partners and executive officers to choose to be subject to the workers compensation laws. If these people so choose, the premium basis of the workers compensation policy includes their remuneration. However, where the individual partners or executive officers choose not to be covered by the workers compensation laws, WC 00 03 08 should be attached to the policy. The endorsement states that the policy does not cover bodily injury to any person described in the schedule and that the premium basis for the policy does not include their remuneration. Note that individuals can be named on this endorsement only when the state workers compensation law allows it.

Sole Proprietors, Partners, Officers and Others Coverage Endorsement WC 00 03 10

In contrast to WC 00 03 08, endorsement WC 00 03 10 is used when partners and executive officers choose to be subject to the workers compensation laws. The endorsement notes that the persons described on the schedule have chosen to be subject to the law and that the premium basis for the policy includes their remuneration. As with the previous endorsement, individuals can be named in this endorsement only when it is allowed by the state workers compensation law.

Voluntary Compensation and Employers Liability Coverage Endorsement WC 00 03 11

WC 00 03 11 can be used to cover all employees, like domestic or farm workers, who are not subject to the workers compensation laws, and it can be attached to an existing workers compensation policy that is in place for those employees that are required by state law to be covered by the workers compensation system.

Coverage provided under this endorsement is identical to that for employers and employees required to be insured under the law. WC 00 03 11 states that the insurer "will pay an amount equal to the benefits that would be required of you if you and your employees described in the schedule were subject to the workers compensation law shown in the schedule. We will pay those amounts to the persons who would be entitled to them under the law." In other words, benefits are provided for injuries that would have been compensable in the same manner as they would have been provided had the employment been subject to any applicable state workers compensation laws.

The insurance provided by WC 00 03 11 applies to bodily injury sustained by an employee in the group of employees described in the endorsement's schedule. The bodily injury must occur in the course of employment necessary or incidental to work in a state listed in the schedule and must occur during the policy period. The insurance does not cover any obligation imposed by a workers compensation law or bodily injury intentionally caused or aggravated by the named insured.

Note that before any payments are made to those entitled to them, the beneficiaries must release the insured and the insurer, in writing, of all responsibility for the injury. Any right to recover from others who may be responsible for the injury must be transferred to the insurer, and the injured party must cooperate fully with the insurer in enforcing the right of recovery. If the persons entitled to the benefits of the insurance fail to do these things, or if they claim damages from the insured or the insurer, the duty to pay under this endorsement ends at once.

Voluntary Compensation and Employers Liability Coverage for Residence Employees Endorsement WC 00 03 12

WC 00 03 12 is something of a companion endorsement to WC 00 03 11. Both offer voluntary compensation coverage, but as WC 00 03 11 should be used by corporations and business entities, WC 00 03 12 can be used by homeowners. If a homeowner wants workers compensation coverage for a domestic worker, such as a housekeeper or a gardener, WC 00 03 12 is the fitting manner for coverage.

WC 00 03 12 adds voluntary compensation and employers liability coverage for residence employees to a homeowners policy, a personal liability policy, or some other policy that provides similar personal liability coverage. The insurance applies to bodily injury by accident or disease sustained by the named insured's residence employees and must arise out of and in the course of employment by the named insured. So, an advantage of this coverage is that if a domestic worker who cannot be brought within the workers compensation system due to state law is injured and sues the named insured employer, WC 00 03 12 will provide protection to the named insured.

The insuring agreement, exclusions, and other provisions of WC 00 03 12 are similar to those of WC 00 03 11, but there is an important point to mention. In keeping with the "personal"--as opposed to the "business"--nature of WC 00 03 12, the endorsement has an exclusion that states that coverage does not apply to bodily injury arising out of any of the named insured's business pursuits.

Waiver of Our Right to Recover from Others Endorsement WC 00 03 13

The insurer, through this endorsement, waives its right of subrogation against third parties who may be responsible for an injury if those third parties are named in the endorsement's schedule.

Workers Compensation and Employers Liability Coverage for Residence Employees Endorsement WC 00 03 14

In jurisdictions where domestic, agricultural, and casual workers are subject to the state's workers compensation laws, the employer is required to provide coverage. One way to arrange for this coverage is through the use of WC 00 03 14. This endorsement contains basically the same provisions as the standard workers compensation and employers liability policy and is to be attached to a personal liability policy, a homeowners policy, or any policy affording similar personal liability coverage with respect to the residence premises of the insured. The effect is the same as if the employee were covered by a standard workers compensation policy since the insurer agrees to pay benefits required by the state's workers compensation laws.

Domestic and Agricultural Workers Exclusion Endorsement WC 00 03 15

Domestic, agricultural, and casual employees are not treated in a uniform manner under the workers compensation systems of the various states. Some states have written their workers compensation laws to include domestic and agricultural employees either on a compulsory basis, or to allow employees to provide coverage voluntarily. WC 00 03 15 can be used by insureds to deny workers compensation benefits coverage to any agricultural, domestic, or household worker as long as the state law allows this course of action. Those workers denied coverage have to be listed in the endorsement's schedule.

Employee Leasing Client Endorsement WC 00 03 19

This endorsement is attached to policies issued to labor contracting businesses. It specifies that coverage for leased workers will be provided by the business that is leasing the employees under contract (the client), not the labor contractor. The endorsement requires that the labor contractor provide its insurer with the following information within thirty days of entering a labor contract: contract effective date and term; client's name; client's federal employer identification number; client's mailing address; and number of workers leased, description of duties of each, and work location for each. Clients of the labor contract must maintain workers compensation coverage for their direct and leased workers, and proof of that coverage must be submitted to the labor contractor's insurer. If proof is not submitted, the labor contractor must pay premium for the leased employees and the insurer may cancel the labor contractor's policy.

Labor Contractor Endorsement WC 00 03 20 A

This endorsement is attached to the policy issued to businesses that lease workers--the client--from a labor contracting business. It specifies that leased employees will be covered for workers compensation under the client's insurance policy. It is used in conjunction with WC 00 03 19, which is attached to the labor contractor's policy. If the client's insurer is not permitted to pay benefits directly, the insurer will reimburse the labor contractor for benefits it is required to pay for the leased employees. This endorsement does not satisfy the labor contractor's need to carry workers compensation coverage. It addresses only the employees leased by the client from the labor contractor specified in the schedule for the states listed. The coverage may be further restricted to a specific contract or project on which the leased employees are working.

Labor Contractor Exclusion Endorsement WC 00 03 21

This endorsement defines employee leasing as an arrangement in which a business engages a third party to provide it with workers for a fee or other compensation. The third party is referred to as the labor contractor. The entity leasing the employees is called the client. The endorsement excludes coverage for workers that the labor contractor leases to clients listed on the endorsement. Coverage must be provided by the client. The endorsement is attached to a labor contractor's policy. Temporary workers are not considered leased workers.

Employee Leasing Client Exclusion Endorsement WC 00 03 22

This endorsement limits coverage under the policy to employees of the insured who are not leased from third parties; it excludes coverage under the policy for workers that the insured leases from labor contractors. It defines labor contractor and client in the same way as does WC 00 03 21.

Anniversary Rating Date Endorsement WC 00 04 02

As discussed in Chapter 10, most companies are subject to experience rating. The experience modification is subject to change on the anniversary rating date of the company, which usually corresponds with the inception date of the policy. However, there are times when the anniversary rating date differs from the policy inception date. When this happens, WC 00 04 02 is attached. The endorsement states that the premium, rates, and experience modification used on the policy may be changed at the anniversary rating date that is shown in the endorsement.

Experience Rating Modification Factor Endorsement WC 00 04 03

This endorsement is attached when the experience modification that applies to the policy is not available when it is issued. WC 00 04 03 states that the factor will be endorsed onto the policy when it becomes available. The premium is subject to change if the modification differs from the one used to issue the policy.

Premium Discount Endorsement WC 00 04 06 or WC 00 04 06 A

Chapter 9 includes a discussion of the premium discount. Endorsements WC 00 04 06 and WC 00 04 06 A may be used to outline the premium discount percentages that apply to the ascending premium amount.

Retrospective Premium Endorsement One Year Plan WC 00 05 03 A

This endorsement acknowledges that a one-year retrospective rating plan is in effect. The endorsement outlines the retrospective premium formula and program elements, including the policies subject to retro rating; loss limitation, if any; loss conversion factor; minimum and maximum premium factors; basic premium factors; and the tax multipliers, excess loss premium factors, and retrospective development factors as they apply in the states where retrospective rating is applicable. Additional information on how retrospective rating works is provided in Chapter 11.

Retrospective Premium Endorsement Three Year Plan WC 00 05 04 A

This is similar to endorsement WC 00 05 03 A, but it pertains to a threeyear retro program.

Retrospective Premium Endorsement One Year Plan--Multiple Lines WC 00 05 12 A

This endorsement is used when a one-year retrospective rating plan applies to multiple lines of insurance, such as workers compensation and employers liability, general liability, and auto liability. It lists the same items that are included in WC 00 05 03 A for all policies that are included in the retrospective rating program.

Retrospective Premium Endorsement Three Year Plan--Multiple Lines WC 00 05 13 A

This is similar to endorsement WC 00 05 12 A, but it pertains to a threeyear retro program that covers more than one line of insurance.

Benefits Deductible Endorsement WC 00 06 03

Some states permit a deductible to be applied to medical, indemnity (wage loss), or medical and indemnity benefits. Endorsement WC 00 06 03 is used to list the deductibles for each type of benefit, as well as the states in which they apply. The deductible amounts apply separately to each claim for bodily injury by accident or disease, unless state law requires payment on a per accident or per disease basis. If the second case applies, the deductibles are applied separately to each accident or disease, regardless of how many employees are injured in the respective accident or by the disease.

The endorsement also specifies that the insurance company will pay the deductible amount for the insured. The policy may be canceled if the insured does not reimburse the carrier for deductible amounts paid within thirty days of a billing notice. In jurisdictions where the insured is permitted to directly pay the deductible, the insurance company becomes the guarantor for the payments.
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Copyright 2006 Gale, Cengage Learning. All rights reserved.

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Publication:Workers Compensation Coverage Guide
Date:Jan 1, 2006
Previous Article:Chapter 5: duties after injury occurs/conditions.
Next Article:Chapter 7: nonprivate insurance.

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