Natural Disaster Recovery Efforts: What You Should Know About Workers Compensation Policies
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By Ken Brown September 29, 2017

In the aftermath of hurricanes Harvey, Irma, and Maria, convoys of electricians, construction workers, arborists, and other recovery teams are pouring into Texas, Florida, and other regions. Each natural disaster brings the potential for confusion and gaps related to workers compensation coverage.

How can employers, agents, and insurance carriers ensure nothing falls through the cracks?

Consider these commonly asked questions:

Are workers who leave one state to work in another covered by their home state’s workers compensation laws or do they fall under the workers compensation system of the destination state? And what if they are insured in the residual market?

In the voluntary market, workers who travel outside their home state to work in another state—whether for hurricane recovery or other reasons—are generally covered as they would be in their home state. Under policy reporting requirements, employers must make their carrier aware that they are beginning work in another state. As those unique situations arise, it’s always best for employers to confer with their agent or carrier and verify specific policy requirements.

Employers insured in the residual market and in need of a policy covering their workers while in another state should contact their agent or carrier to find out if the policy will extend to that other state. For example, if a policy does not extend coverage into Florida, then the employer should contact the Florida Workers’ Compensation Joint Underwriting Association. Florida also has unique insurance requirements for out-of-state contractors, so it is important that employers talk to their agent or carrier first.

What happens when a hurricane causes a disruption in normal business activities, putting workers in a different role than they would normally perform?

If severe weather should cause a clerical worker to take on a new role helping to clear debris from the parking lot or if office workers suddenly become telecommuters, this can affect an employer’s workers compensation policy, even if the work is only temporary.

Essentially, the carrier will determine if the disruption qualifies as a “change in operations,” which may trigger the reassignment of classification codes according to the changes in duties. Once normal operations resume, the appropriate classifications will be reapplied.

Rule 1-F-1 of NCCI’s Basic Manual for Workers Compensation and Employers Liability Insurance outlines how changes in workplace operations may be applied. As always, it’s important to notify the agent or carrier about any change.

How does travel outside the United States affect employers liability insurance under the policy?

With extensive damage throughout the Caribbean, crews are traveling internationally for recovery efforts.

NCCI’s Workers Compensation and Employers Liability Insurance Policy language includes a section describing when and how insurance applies for employers liability insurance coverage. Employers should verify what their policy does and does not cover, as this insurance may be contingent upon where the workers will be performing their duties and other criteria specified in the policy. As always, companies should check with their agent or carrier about coverage for workers sent abroad.

NCCI regularly issues circulars for its members on these and other issues related to workers compensation. During times of heightened uncertainty, these circulars are provided free of charge to the public to help foster greater understanding of the potential impact on workers compensation policies.

Current circulars include:

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.