The standard WC policy does provide limited coverage for some foreign (international) exposures. It first provides whatever extra territorial coverage that is mandated by the state workers compensation laws for states listed in item 3.A of the policy information page. For Indiana, IC 22-3-2-20 provides that the coverage applies whether an injury "occurs within the state or some other state or in a foreign country." However, Indiana's workers compensation act does not mention temporary or permanent conditions.
The Indiana Code is available on the State of Indiana website at this address: http://www.state.in.us/legislative/ic/code/.
The standard policy additionally provides employers liability coverage (item 3.B of the information page) for employee injury sustained while temporarily outside of the country for citizens or residents of the US or Canada.
If the insured has a foreign location with non-citizen, non-resident employees, or US citizens permanently assigned there, or US citizens not there in connection with work from a state listed in item 3.A, the standard policy does not apply.
Coverage for foreign exposures therefore requires special endorsement. The NCCI Forms Manual of Workers Compensation and Employers Liability Insurance does not provide a standard or advisory endorsement for foreign voluntary coverage, repatriation expense and endemic disease coverage. Carriers therefore must develop and file their own foreign coverage endorsements and premium charges.
Permanent and Temporary
Operations outside the US may be on a "temporary" or "permanent" basis. These terms are generally linked to the amount of time an employee is outside the country working for the insured. "Temporary" does not have a universally accepted definition, but is often viewed as 6 months or less. Extending coverage to employees who do not come under the state workers compensation law because they are outside the country on business is often known as Foreign Voluntary Compensation coverage. It is often written in conjunction with Repatriation coverage. Foreign coverage is not required in the assigned risk market and not provided.
An employer with employees "permanently" working outside the country should determine the requirements, if any, of the country where the employees work or reside. Indiana law, IC 22-3-2-19 provides that the workers compensation act does "not apply to employees and employers engaged in interstate or foreign commerce wherein the laws of the United States provide for compensation or for liability for injury..." This section of the Act means that federal law takes precedence over state law. For instance, an employee subject to the FELA (railroad workers), the Jones Act (maritime employments), Coal Mine Health & Safety Act (black lung disease), or the LHWCA (longshore & harbor workers) would not be subject to the Indiana WC Act.
In summary, we suggest that agents and underwriters should seek advice from their carrier legal counsel to determine whether a particular individual or a risk falls within the definitions of a workers compensation act. The ICRB does not provide carriers with legal opinions on any issue.
Whether certain individuals are covered under the policy is a legal question which must be determined based on state law and the state's definition of "employment", or "employee". If a worker is determined to be an employee within the workers compensation law of a particular state, then the policy covering that state would respond. In such instances there is no need to provide Foreign Voluntary Compensation coverage - the employee's payroll would be allocated just as any other covered employee. Assigned risk policies would respond to injuries to these employees without need for specific endorsement as they come under the law of the state.
The ICRB compiled a report titled "International Workers Compensation" in an attempt to summarize the laws of countries where we could find information on workers compensation or industrial injury laws in other countries.
An employer would most likely need two types of insurance policies:
· a workers compensation (WC) policy, and
· an “employer responsibility” policy for the foreign (international) coverage.
Many wholesale insurance brokers have access to insurance companies that have international departments that write such foreign policies. Most independent (retail) agents have access to several wholesalers.
Many workers compensation insurance companies will require an “employer responsibility” policy for the foreign coverage to be in place before they will write the WC policy.
This coverage is not really “workers comp” since the WC statutory scheme is more of a U.S. and Canadian province legal system.
In the rest of the world the insurance product is called “employer responsibility”. It’s a liability, accident, and health type of coverage, and often includes a small amount of property, some auto liability, and products or completed ops coverage as well as endemic disease and repatriation. There can also be optional coverages for kidnap and ransom. Premiums start around $2,500 a year and and vary based on the insurance company underwriting the coverage.
These foreign coverage policies usually exclude coverage in “hot spot” countries such as Afghanistan and the Ukraine right now, as well as countries under an OFAC ban (Cuba, Iran, North Korea, Angola and most of the “stan” countries). These countries are under economic and trade sanctions by Office of Foreign Assets Control (OFAC) of the US Department of the Treasury. All trade is banned or limited.
The foreign coverage is written with a limit (usually a million dollars) and often, if the employee files a claim in the U.S. for workers comp, the WC carrier will review the facts of the injury and respond. It appears that the foreign policy picks up the medical and travel expense from oversees, and the WC policy picks up the indemnity (lost wage benefit) and ongoing medical treatment stateside.