What is the Role of the Division of Insurance Regarding Workers' Compensation?

 Who has to have Workers' Compensation Insurance?

 I am incorporated, but have no employees. I receive no salary at all from the business and I am never    actually on

anyone's premises but my own. Do I need workers' compensation insurance?

 I am self-employed and was told by an insurance agent that I cannot get coverage for myself but many    people won't hireme unless I have coverage. What am I supposed to do?

 My account was audited and I disagree with my insurer over the correct premium. How can I dispute their    results?

 Can an Insurer Cancel my Policy in Mid-term?

 I have an assigned risk policy and I am engaged in a classification dispute with my carrier. Can they    cancel me if I refuse to pay them what they believe I owe?

 My workers' compensation premiums continue to rise. Is there anything that can be done to control the    cost?

Who has to have Workers' Compensation Insurance?
Every employer must have workers' compensation insurance, except unincorporated sole proprietorships, or partnerships, or limited liability companies having no employees. Non-profit corporations with no paid employees are also exempt from the requirement to purchase workers' compensation insurance.





I am incorporated, but have no employees. I receive no salary at all from the business and I am never actually on anyone's premises but my own. Do I need workers' compensation insurance?
In most cases, yes. Since you are an employee of the corporation, coverage must be purchased for you and any other corporate officers. Even though you are not paid for your work and cannot receive weekly income benefits from workers' compensation, your medical costs would be covered if you were hurt on the job. You do not have to be at any particular location to be eligible for workers' compensation benefits. Your injuries or illness must simply, according to Chapter 152 of the Massachusetts General Laws, "arise out of and in the course of employment." You should also realize that any health insurance you have may in fact refuse to pay for benefits that would have been covered by workers' compensation had you had it. If you are organized on a non-profit basis and have no paid employees, you need not buy a workers' compensation policy.






I am self-employed and was told by an insurance agent that I cannot get coverage for myself but many people won't hire me unless I have coverage. What am I supposed to do?
If you are unincorporated, you have basically three choices. The first is you can talk to your customer and explain that you are unincorporated and have no employees. They may waive the requirement if you can prove to their insurer that you are an independent contractor and not your customer’s employee. Workers’ compensation insurers will sometimes accept evidence of a general liability policy as acceptable proof. The second is, you may buy workers' compensation on an "if any" basis. This means that you will have a policy, pay a minimum premium, and have the coverage that you can verify. However, if you do this, be very careful that any subcontractors you hire have workers’ compensation or you may be charged a premium by the insurance company, as if they were your employees. Workers' compensation insurers will often accept your purchase of an 'if any' policy as evidence of your independent states.

Last, you could incorporate and then buy a policy. Certainly this will cost you money and you will need to be careful on how you coordinate between your health coverage and your worker's compensation coverage for medical costs that may arise during employment. There is an advantage to incorporating and buying workers' compensation coverage. Medical plans sometimes will not pay for work related injuries whether or not there is an in-force worker's compensation policy. But, far more importantly, most medical plans will not pay for vocational rehabilitation or income replacement. This is a decision that you need to think about very carefully.






My account was audited and I disagree with my insurer over the correct premium. How can I dispute their results?
If you believe that you are being charged an incorrect amount, you can submit a written request to the Workers' Comp. Rating Bureau (WCRB) asking that it review your case as to the correct application of the rating system. If you disagree with the WCRB's finding, you have 30 (thirty) days to appeal in writing to us. The WCRB is located at 101 Arch Street, Boston, Massachusetts 02210. The telephone number is (617) 439-9030 and the fax number is (617) 439-6055.






Can an Insurer Cancel my Policy in Mid-term?
An insurer can cancel a policy mid-term for only three reasons: (i) non-payment of premium, (ii) fraud or material misrepresentation or (iii) a substantial increase in the hazard being insured.






I have an assigned risk policy and I am engaged in a classification dispute with my carrier. Can they cancel me if I refuse to pay them what they believe I owe?
Employers in the Pool that are threatened with a cancellation that they believe is unjustified have the right to appeal these within ten days of receiving the notice. The appeal should be directed to the Office of Insurance at the Department of Industrial Accidents, 600 Washington Street, Boston, Massachusetts 02111. That office has the authority to prevent cancellation until the dispute is resolved.






My workers' compensation premiums continue to rise. Is there anything that can be done to control the cost?
If you are paying more than $500.00 in annual premiums, then your costs, at least to some extent, will be a function of your losses. If you can get your losses down, your premiums will come down. It is very important for you to take an active interest in matters such as safety, the medical management of claims and early return to work for any injured workers. If you are in the assigned risk pool, and are paying over $5,000.00 a year in premium, the odds are that your agent or broker may be able to find voluntary coverage for you. If he or she is successful, you may then be eligible to receive a stock or non-stock premium discount. Ultimately, employers pay the costs of losses to carriers plus the costs of the carriers operating. The more employers do to control or prevent losses, the less expensive workers' compensation will be for all employers. Finally, employers in the Pool can get up to 15% premium credits for hiring a Qualified Loss Management firm, to help them contain costs. Your agent can provide you with a list of such firms.






I believe that my experience modification has gotten worse and my ARAP (All Risk Adjustment Program) charge has gotten higher because of one or more claims that I can prove were fraudulent. Is there anything I can do about this?
Yes. Allegations of fraud should be reported to the Insurance Fraud Bureau ("IFB") (617) 439-0439 which has the power to investigate these allegations. Experience modifications may be recalculated when paid workers' compensation claims are later determined to be "noncompensable". Administrative Judges at the DIA have the power to make such determinations. Third party claim forms may be obtained from any DIA office.