NC Cracking Down on Enforcement of Workers’ Compensation Rules

Winston-Salem, NC 6/13/2012

 “There are a lot of people that don’t have workers’ compensation coverage,” says Jack Bayliss, an attorney with Carruthers & Roth in Greensboro. “If you have a corporation, and you’re the president, and someone’s a secretary, and you have one employee, that still counts as three people.”

Grainger Pierce, attorney with Nexsen Pruet who practices in Greensboro and Charlotte, says the crackdown began after an investigative report by the Raleigh News & Observer revealed a discrepancy of about 30,000 businesses between the records of two different regulatory agencies. The N.C. Rate Bureau, the Raleigh-based organization that sets standard insurance rates, plans and job classification systems, noted about 140,000 businesses in the state with workers’ compensation insurance — even though the state Department of Commerce noted about 170,000 businesses that would qualify on its books. Pierce says the N.C. Industrial Commission has started to seek affirmation on the front end that businesses have proof of coverage, rather than waiting to act until after something goes wrong.
 
“If you’ve got somebody without coverage or assets, and an employee gets hurt, you’ve essentially got a wrong without a resource,” Pierce says.  The state statute dictates that if a company doesn’t have workers’ compensation coverage, the commission can levy a penalty of up to $100 per day per employee for each day the company did not provide insurance, Bayliss says, adding that the penalty can be backdated to the formation of the company.
 
Employers could even face criminal charges if they willfully fail to have the insurance, Bayliss says. In May, the Industrial Commission published a contempt hearing docket, which called out many employers who had previously received workers’ compensation claims but had not paid. At those hearings, the commission threatened employers with jail time unless they took steps to settle their claims, according to a report from the McClatchy-Tribune news service.
 
The commission has also announced its intent to schedule regular contempt hearing dockets in coming months. Failing to comply can bring harsh penalties, regardless of whether the company was intentionally negligent or simply confused. Some small businesses think their liability insurance covers the necessary workers’ compensation protection, but that’s not the case, says Cal Adams, an attorney with Womble Carlyle in Winston-Salem.
 
“Everybody basically — small businesses, big business — in North Carolina has to have it,” Adams says. Adams recommends that companies check with their insurance agent annually to make sure each of the businesses’ insurance policies is up to date. “They’ve got a number of different insurance policies, and they need to be checking just once a year to make sure if they’re all in place,” Adams says. “If something goes wrong, you can bet your bottom dollar it’s the place where they let their insurance lapse. And then their out of pocket is going to be huge, as compared to that 30 minute phone call to check.”
 
Beyond that phone call to check in with your insurance agent, workers’ comp experts have some solid tips for small businesses to stay in compliance with regulations and minimize their risks.  If you have questions about about your insurance coverage for your business, please contact us for a comprehensive exposure analysis.
 
Content by Catherine Carlock - Special Reports/Publications Writer- The Business Journal

View All News Articles

What Our Customers Say!

Fletcher Wilson has established himself as a highly-skilled insurance professional.  He and his firm excel in all areas pertaining to Insurance and Risk Management solutions.  Fletcher has built a reputable firm in our community with trustworthy associates.  He and his team handle their clients in a very professional manner. 

Steven H. Davis, Principal at Holden & Mickey, Inc.

Read what others have to say.

What's New

Claims and Your Insurance Rates
10/24/2017

When is it time to contact your auto insurance or home insurance agent to file a claim?

You might be thinking, "Whenever my car or house has been damaged, like by an accident, or a disaster." But deciding whether to file a claim can be a complex process. In some cases, a claim may cause an insurance company to raise your rates.  In other instances, a claim could land your name in a database that might make it difficult to get or maintain coverage in the future.  Before you file a claim, make sure you completely understand how it will impact your future premiums and insurability.
 
Claims that spike premiums
 
Certain types of home insurance claims are more likely to trigger an increase in premiums. They include:
 
1. Dog Bites
 
2. Water Damage
 
3. Slip-and-Fall Claims
 
"The whole point of insurance is to make good on a loss, to make individuals whole again," says Claire Wilkinson, the editor of Terms + Conditions, the blog of the New York-based trade group the Insurance Information Institute. However, many people fear that filing insurance claims will cause them to be "blackballed" by insurance companies, resulting in higher premiums, loss of coverage and difficulties obtaining new insurance. And in some cases, they might be right.  Read more here:
Read More »

 

What You Should Know About Rental Car Insurance
8/1/2017
There are some very serious contractual gaps in coverage for rental vehicles. Even if you purchase their Collision Damage or Physical/ Loss Damage Waivers, many rental car contracts exclude the following:
  • Theft of the Vehicle
  • Tolling, or Turning the Vehicle Over
  • Lease Gap coverage
  • Loss of Use
  • Glass, Tire and Undercarriage Damage
  • Animal Collision
  • Flood and Hail Damage
  • Damage above the Windshield
  • Individuals who rent personal vehicles for extended periods and do not have a Personal Auto policy in force
  • Drivers who rent, and do not own another vehicle insured elsewhere, need to be expecially careful here
Read More »

 

5 Ways to Control Rising Homeowners Insurance Premiums
6/10/2017
Just as with real estate values, location rules when it comes to homeowners insurance costs. According to the National Association of Insurance Commissioners, the average annual U.S. premium was $842 in 2015, the most recent year for which figures are available. Floridians paid the highest rates, averaging $1,534 a year, while at the opposite end of the spectrum, homeowners in Idaho paid $422.  North Carolina residents averaged $664 per year. 
 
Fortunately, you can take several steps to bring down the cost of your own homeowners policy, short of packing up and moving:
Read More »