Uncover the Facts About Workers Comp in Monopolistic Fund States

September 13th, 2023

In the world of trucking, understanding the complexities of Workers Compensation is crucial.  Workers Compensation is often a requirement in most states and provides essential coverage for work-related injuries and diseases.  However, the nuances of Workers Compensation laws vary from state to state, creating potential pitfalls for those who aren't well-informed.

Workers Compensation: Private Insurer vs. State Fund

In the vast majority of states, Workers Compensation must be purchased from a private insurer.  However, some states also offer coverage through "competitive" state fund organizations.  These entities operate on the same principle as private insurers but usually lack the ability to provide out-of-state coverage.

The question arises: what about states that only offer coverage through a state fund?  These are known as the "Monopolistic Fund States," and include North Dakota, Ohio, Washington, and Wyoming.

Extraterritoriality and Workers Compensation Laws

Workers Compensation laws are extraterritorial.  What this means is that a worker hired in a particular state is eligible for benefits under that state's Workers Compensation laws, even if they suffer a work-related injury or disease while traveling outside its boundaries.

There's a twist, however.  In certain instances, an injured worker has the option of filing for Workers Compensation in their home state or under the laws of the state where the injury occurred.  This option extends further for Owner Operators - they can also seek benefits in their Motor Carrier’s home state or their lease agreement’s contract state.

The Risk of “Venue Shopping”

This flexibility in choosing where to file for compensation – often referred to as “venue shopping” – can potentially expose a Motor Carrier to uninsured losses.  This is particularly true if a Workers Compensation claim is filed in one of the Monopolistic Fund States and the Motor Carrier lacks a state fund policy.

Contingent Liability Policies and Monopolistic Fund States

For Motor Carriers and their Insurance Agents, it's important to note that most Contingent Liability policies do not cover claims filed in Monopolistic Fund States.  Therefore, it is essential for Insurance Agents to thoroughly read and understand the Contingent Liability policy they purchase on behalf of their Motor Carrier client.  This ensures that the policy does not exclude claims filed in one of the four Monopolistic Fund States.

Conclusion



Navigating the world of Workers Compensation requires a thorough understanding of the laws and policies in each state.  It’s important to ensure that you're adequately covered, and that your insurance includes provisions for any eventuality, including claims filed in Monopolistic Fund States.  As always, due diligence and a keen understanding of the policies you invest in can go a long way in providing peace of mind on the road.

To learn more about Workforce Insurance Underwriters' new Occupational Accident and Contingent Liability Insurance programs, book a meeting with an industry expert by clicking here. 

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