Unfortunately this is a question facing both interstate and intrastate trucking companies whose home office is in state “A” but they operate in states B,C,D,E. etc… These companies face what is called Multi-State Exposure. This occurs when a driver gets injured on the job in a different state from which his company is domiciled. What nobody tells these companies is that the driver has the ability to receive benefits from more than one state on your dime!
Competitive rates for Workers Comp Insurance in the trucking industry are difficult to obtain due to the difficulty the underwriter faces assessing the risk. Add multiple state workers comp laws into that equation and you have a recipe for high premiums, open claims and payouts that are double and even triple what they should be.
When an out of state claim happens, two jurisdictions come in to play. If the claim is handled by the company’s home state the driver will retain legal counsel in the state in which the injury occurred. Once qualified to receive benefits from the home state, the driver can go the state where the injury occurred and receive additional benefits. This is known as “Piggybacking.” This is the cost of not fully comprehending the Workers Comp Laws in the states you operate in and this can certainly be an expensive lesson.
There are ways to remedy this scenario…
Option A: Understanding the laws in the states you work in is one way. However, it is considered the long way and besides, learning multiple states workers comp laws can be extremely time consuming. Especially for an individual outside of the insurance industry. Not to mention you have a business to run!
Option B: Hire a broker who manages your risks, knows what you don’t about in/out of state workers comp laws and handles things when these unfortunate but inevitable claims happen. By partnering with a knowledgeable third party Risk Manager, you are able to focus more on the business at hand and the situation will offer a sense of tranquility as it relates to these unforeseen events.
