WC: Other States, Stop Work Orders and Multiple Locations Reminder
We mentioned this topic in our December Agency Newsletter, but felt it important enough to to remind you again. The following has been reprinted from the Januray 24th issue of the Massachusetts Agents.
Comp. Corner: “Stop Work Orders" An Issue Again ...
Last spring after a rash of “stop work orders“ (SWO) were issued by the Department of Industrial Accidents (DIA) based on not having a secondary location listed on a workers‘ compensation policy, MAIA and the Workers‘ Compensation Rating and Inspection Bureau (WCRIB) worked with the DIA to agree on a procedure to be followed by the DIA when faced with a location issue. The procedure appears below:
Part of the discussions among the DIA, MAIA and the WCRIB was an agreement that each location of an insured
does not have to be listed on the policy so long as “Massachusetts“ is listed in 3A of the policy. If “Massachusetts“ is listed, all locations and all employees of the insured are covered under the policy. However, while the DIA agrees with this position, it will “respect the position of the insurer if the insurer denies coverage for an unlisted location.“ As such, the best advice is to remind your workers‘ compensation clients that if they open a new location they should advise you in advance so you can have the location added to the policy.
The current DIA enforcement procedures involving secondary, tertiary or other permanent locations of employers operating in the Commonwealth under the provisions of an active Massachusetts Workers’ Compensation insurance policy are as follows:
1. The address and location on the policy will always control the decision. This means that the address and location on the policy is the main business premises listed in the policy and therefore employees at that location will be covered. Other locations will be looked at with that basic fact being established. No Stop Work Order would ever be issued without first conducting an investigation.
2. Temporary work sites away from the insured main business premises are not considered to be a different permanent location for the purpose of determining coverage. The “insured main business premises”, will be the location listed in Item 1 of the policy information page. A temporary work site is any location, not shown to be a permanent place of work, and from which the workers of the insured will return at sometime in the future.
3. When faced with a potential multiple locations issue the investigator will contact the insurance carrier to de- termine whether the employees at the additional location are covered under the employer’s policy. Contacting the insurance carrier is a crucial part of the investigation and will be done before any Stop Work Order is issued.
In the event the employer at the additional location is a different and distinct legal entity from the employer listed on the policy’s information page the investigator shall employ the same procedure on this other legal entity and shall only issue a stop work order to that other entity in the event he confirms no coverage exists for the employees of the entity at the other location. The different and distinct legal entity will have to show co- verage under a separate policy of its own or provide proof that it is properly covered by the same policy issued to the employer listed on the policy information page.
If you have any questions about this policy, please contact Frank Mancini, President and CEO of MAIA or Dan Foley, VP of Government Affairs & General Counsel at 800.972.9312 or 508.634.2900 or by email at email@example.com or firstname.lastname@example.org.