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Archive for November 2010

Workers Compensation Insurance Change – New York

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The context for this is that New York State had changed its regulations regarding Workers Compensation Insurance in 2007. In essence, incidental time in New York for any employee of a firm outside NY might, and significant time would, trigger penalties if that company did not have NY on line 3A of their Workers Compensation Insurance.  We saw clients threatened with fines for $20,000 and up.

Line 3C provides “all other states” coverage for incidental exposures. Line 3A lists specific states. NY began demanding Line 3A listing for truly incidental exposure and fining companies when the State caught that exposure. The current change, though still more restrictive than most states, reduces some of the pressure. Our thanks to the Professional Insurance Agents of New Jersey ( ) for much of this information and for working with NY State to get this improvement. 

Please note that routine deliveries or other activity in NY by a company based in New Jersey could still require Line 3A coverage and trigger fines for all the time there was activity without Line 3A coverage.  Go to our website ( or our Workers Compensation page ( ) for more info or call us at 1-800-548-2329 .

On Nov. 22, 2010, the New York Workers’ Compensation Board (WCB) issued Subject No. 046-454, which carves out some Item 3.A. coverage exemptions for out-of-state employers having incidental or temporary work in New York. This is a significant change from the rigid Item 3.A. coverage requirement adopted by the WCB following the 2007 Workers’ Compensation Reform legislation.

Out-of-state employers who have Item 3.C. coverage will now be in compliance with insurance requirements (and not subject to enforcement penalties) as long as the employer:
1) is not required to register with the state Department of Labor and pay unemployment insurance for any period in question (see for details);
2) has no permanent physical location in New York or has no employees whose primary work location is in New York;
3) is not operating in New York under a permit, contract or license granted by the state of New York, its counties or any municipality as defined under Section 57 of the Workers’ Compensation Law;
4) is not working as a contractor/general contractor/subcontractor on a construction project in New York; and
5) had no employees physically in New York the previous year for at least 40 hours of every week for a period longer than two consecutive weeks, or had no employees present in New York for 25 or more individual days (e.g., five employees working for five days in New York equals 25 individual employee days). Note that when employees travel through the state without stopping for deliveries, pick-ups or other work, it is not considered a work day.

If the insurer providing Item 3.C. coverage is not authorized in New York, new Form C-105.11 will be required to be completed by the insurer. The WCB will post on its website a list of all carriers that have filed the Form C-105.11, and will provide periodic updates to such listing.
While more restrictive than many surrounding states, this change in enforcement standards is a welcome improvement for employers conducting incidental and temporary work in New York.

Managing Workers Compensation Claims

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Here’s our Workers Compensation Insurance link:

An issue for employers: Why would an employee not take Workers Compensation if injured on the job?
Employers should keep an eye on situations where injuries occur on the job but no claim is filed. For a number of reasons those claims can pop back up.

A) An injured employee may think that it is in his or her best interest to pursue a tort claim against a third party.
Particularly in states, like New Jersey, where Workers Compensation treatment is under control of the employer/carrier, an employee may perceive it to be better (or be advised by an attorney that it is better) to seek treatment that may increase the chance of a lawsuit against someone other than the employee. Or in a state where the WC carrier can recover medical and compensation losses from successful third party claims, employees may perceive a value in staying out of the WC system. In small claims, a manipulative attorney and compliant physician can generate a lot more evidence and expense than they could under the controls of many WC systems. Then, if the claim does not progress or looks like it may not be successful, it may be possible to open a WC claim instead.

As a real-life example of a case where an employee might avoid WC to pursue third party claims, consider the following.
A laborer is working on a large construction site. He works for Subcontractor A and is covered by WC. He is putting in supports for a trench. Subcontractor B is responsible for the machine digging the trench.
Our laborer example is severely injured by the trenching machine. He can stay in the WC system, or try for a claim against Subcontractor B, or even a claim against the manufacturer of the trenching machine. (This is a real case.) The WC system is good for the medical costs but not necessarily for the lost wages, and certainly not for the pain, suffering, and loss of consortium issues available under the tort system. For truly severe cases, the employee may want to take a dual track, pursuing both WC and tort. The employer and carrier will want to keep an eye on progress in both cases, and any awards in the tort system.

B) In a less threatening situation, an employee may not be an eligible employee for Workers Compensation.
In some states some employers do not have to take Workers Compensation because they have too few employees. Then a Comp claim would not be covered.
Generally, Sole Proprietors and LLC members are not automatically covered and must elect coverage. Most small business owners do not elect coverage when it is not mandatory for their business structure.
In some states some specific classes of employees are not mandated for coverage. However, your insurance advisor should be able to tell you if those excluded classes can still sue the employer for injury.

For more background, Rebecca Shafer has an excellent blog dealing with WC cost reduction.

Insurance Agency choices

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Our thanks to Peerless Insurance ( for this piece, which is just shameless self-promotion for us.
Call us or go to our website ( for more info.

To get the lowest rates and the best coverage you need to acquire your business insurance from a local independent insurance agent rather than dealing directly with an internet based insurance company. It is not true that that dealing directly with an insurance company is the best method to get the lowest rates. In fact, there are many reasons why you should be using an independent insurance agent to provide your business liability and property insurance.

Reason #1: Local Independent Agents Save You Money

When you are dealing directly with an insurance company, you don’t have some one making sure you are getting the lowest possible rates as well as the correct coverage. This is important because your business insurance rates are not only based upon your type of business, sales, loss experience and other information about your business, but are also based on the operating costs of the insurance company. An independent agent will make sure you are dealing with the a low cost company.

When you work with a local independent insurance agent, they will look at multiple companies to make sure you are getting low premiums and the correct coverage. Local independent insurance agents are in business to provide their customers with the best possible coverage at the lowest possible rates, so in the end you normally pay less for commercial insurance.

Reason #2: Local Independent Agents Give You Better Service

A local independent agent offers you one-on-one service. You can call them directly without having to deal with annoying 800 phone directory options or computerized assistants. You can visit your agent in person or have them visit you as they are located in your local area. When it comes to business insurance, business owners need that attention. They need to know that if something happens that they can get immediate attention. It is very frustrating to need your insurance agent and not be able to get in contact with them.

Having your own insurance agent is important. When you choose to deal with a local agent, you get your own agent. Dealing directly with the company may mean you never have your own agent. You calls are answered by a call center and you speak to someone different every time you call. If you want focused attention and an agent that really knows your business then you want to deal with a local independent insurance agent.

Reason #3: Local Independent Agents Have Knowledge About Your Business

One part of liability insurance business owners may not think about is that insurance rates are based on where you live. When you get business insurance a local agents will know the area and your business insurance requirements. They will know what types of coverage you need and how much coverage you should get. They know from experience, not just from looking at charts that give averages. You can actually get a more detailed insurance policy when you work with an independent agent because the agent knows the area and what is needed in insurance coverage for your specific business.

The local independent insurance agent will provide many valuable services. They will visit your company, do a risk analysis and learn about your business so they can determine what are your specific insurance requirements. More important, when you have a local independent agent as your representative you you will have someone to represent your interests and fight for your rights in case of a claim or a conflict with the insurance company. If you are dealing with a website you will most likely wonder – “Who should I speak to when I am in trouble?”

As you can see, there is a huge difference between buying business insurance, commercial insurance or liability insurance from a local independent insurance agent versus directly from the insurance company. You will get a better insurance product and better service if you choose to do business with a local independent insurance agent.

BOP – Businessowners Policy – Competition and changes

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Carriers are engaged in heavy competition for New Jersey and New York business insurance. As an example, Preferred Mutual ( is introducing new coverage and pricing for its BOP (BusinessOwners Program).
Small and mid-size business owners should be reviewing cost and coverage with their insurance advisors (call us at 1-800-548-2DAY or go to ).  Or for a quick quote:

Things you should be looking for:

Can your business fit into a BOP?  It can cut prices and expand automatic coverage; check with us.

What limit does the policy give you for all products claims in a year?

If you have to include your landlord under your insurance, is that automatic and does it cost you more?

Does your policy cover your loss of income while it’s closed after a fire or other damage?  For how long?

What discounts does the policy offer?  Which are you getting?

If you would like to go over these, and many other questions for small and mid-size businesses, call us at 973-426-1500 for Morris County, New Jersey insurance and 1-800-548-2329 for other locations.  For Workers Compensation Insurance call or check

Massachusetts Workers Compensation Insurance Change

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The newest bulletin on the MA Workers Comp mess, from the Professional Insurance Agents ( Some of the problems have been cleaned up (thank you PIA). But employers with work in MA will still have to be careful in record keeping and making sure MA is listed in their WC policy.  Call us at 1-800-548-2329 GBW Insurance or go to or for a quote go to

“Great news! The revised wording of Form 154 no longer contains a 10-day advance cancellation notice requirement.
On Aug. 26, 2010, Paul V. Buckley at the Massachusetts Department of Industrial Accidents issued Circular Letter No. 335, which introduced Form 154 Verification Of Massachusetts Workers’ Compensation Coverage For Out Of State Employers Operating In Massachusetts and the conditions that would necessitate an employer’s insurer to complete it. Some insurers immediately reacted to the problematic provisions of the form by refusing to sign it. Consequently, employers faced the potential of stop work orders and fines imposed upon them for noncompliance, though lawfully maintaining the 3.C. Other States insurance coverage that would have been certified by the form.

Your association sent a letter to the DIA outlining concerns over the new Form 154 requirements. PIA is pleased to report that most of these concerns have been favorably addressed in the newly revised Circular #335 and Form 154.

• Form 154 will only be required when requested by the DIA; not when applying for a license or permit, or when conducting work for a general contractor.
• The insurer’s 10-day advance notice of policy cancellation or modification has been removed from Form 154.
• The insurer’s representative now affirms that “The information contained herein is true to the best of my knowledge and belief,” allowing for mistaken representations.
It is hoped that insurers will be more inclined to complete Form 154 for their policyholders and avoid the unnecessary penalties imposed upon lawfully insured out-of-state employers. Remember, this form is not required if the employer has 3.A. coverage in Massachusetts or when the DIA has not requested it.”

For more questions on Workers Compensation for small and mid-size businesses in New Jersey and New York, call us or go to