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more comment on Workers Comp insurance for the owner December 12, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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more comment on Workers Comp insurance for the owner
December 12, 2017
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more comment on Workers Comp insurance for the owner - from December 6, 2017 article
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Ken,
    We almost always recommend owners/officers include themselves in workers compensation coverage, even those that aren’t doing the servicing and only acting in a sales/office or clerical position.  The big exposure would be just as Alan mentioned and an auto accident, the health insurance would kick in at this time if you were to exclude yourself from coverage.  However, with going through your health insurance you are losing some valuable benefits that could have been picked up under the WC policy, not to mention paying co-pays, deductibles, future physical therapy etc.  At minimum we would recommend the owner finding out the exact dollar their portion of the workers compensation would be and then making a decision from there.
    Thanks
Jeff Schulz, CIC
J.Krug & Associates, Inc.               
Mount Prospect, IL 60056
(847) 818-7508
jschulz@jkrug.com
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Ken, 
    Another good reason for owners to get covered on workers comp is that WC offers disability income in addition to payment of medical bills for work related injuries.  Out here in California workers comp is fairly expensive (Alarm Installation falls under class code 7605 with the rates anywhere from 3.00 to 8.00), but it suddenly makes more sense as soon as the owners graduate out of doing field work and are only doing sales and admin, then they can be classified as outside salespersons (cc8742) where the rates are usually under 1.00.  The state even puts a cap on the amount of owner payroll an insurer can charge premium on.
    We write a ton of workers comp for alarm companies, and I can tell you from the feedback we get from our customers that have made claims there, that covering owners/officers who can be legitimately classified as either Outside Sales or office workers (clerical) is good cheap insurance.
    Thanks,
Larry St John, CIC
Eclipse Marketing & Insurance Services
lstjohn@eclipseinsurance.com
707.469.6776 x102
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Response
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    Sound advice from two experts on The Alarm Exchange in the Insurance Broker category.  Probably a good idea to carry the WC coverage evern if you're the owner, but at least find out the additional cost to the premium.
    But I want to address an even more serious issue regarding WC insurance.  What happens when you don't carry it, even for your employees?  Well, when your employee gets hurt on the job, you're screwed.  You will be liable for everything that WC would have covered and paid out.  Your general liability carrier won't cover you.  If the employee also doesn't have health insurance, you're really screwed.  
    Employees hurt on the job is more than likely going to be your fault.  Why?  Because the law requires you to properly train employees and also requires that you provide a safe work environment.  And a fall from a ladder, you are beyond screwed.
    Check your WC policy today and see if it makes sense for you to be added.  
    If you are a one man operation you should still check it out.  If you do subcontracting work then whoever is hiring you should require you to carry WC insurance - they would be protecting themselves and you.  And, make sure both you, the subcontractor, and whoever hires you is properly insured with an E&O policy.  Finally, both subcontractor and whoever does the hiring should be covered by a proper contract with the End User.  That, in fact, may be the best way to cover your bases.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com