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Workers' Compensation, |
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WORKERS'
COMPENSATION |
Because
workers’ compensation is required by statute, all policies are
essentially identical. Litigation often arises out of premium calculations,
the improper use of employment classifications, or representations regarding
exposures. |
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WRAP-UPS
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Wrap-ups,
sometimes referred to as owner-controlled insurance programs (OCIPs),
are used to combine several coverages (builder’s risk, automobile
liability, general liability, products liability, and workers’ compensation)
into a single insurance program covering a construction project. Such
programs typically cover the owner and the contractor and its subcontractors.
The rational is to more efficiently protect the owner
from risk and eliminate the potential for disputes between insurers that often arise when
the parties have separate insurance policies. In large projects, the OCIP may also
include professional liability coverage for the project’s architects,
engineers and designers. Products liability coverage is usually limited to two or three years. Contractors and subcontractors, therefore, may purchase separate coverage after that time to protect their ongoing liability risk. |
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SELF-INSURANCE
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Large companies
and governments often establish self-insurance programs to capture the
investment opportunity from reserves that would have been held by the
insurance companies under an insured plan. Self-insurance is often applied
to workers’ compensation. It may be established for liability and
property risks if the exposures and resultant premiums are sufficiently
large. When a company self-insures, it does not eliminate the need for insurance, it simply raises the point where excess coverage comes into play. An important point here is the necessity of notifying the excess underwriter whenever a claim reaches the agreed notice point, which is typically a specified percentage of the insured’s retention or a severe type of loss. |
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contact
Brian Gagan
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