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Policy Coverage: No Limits, Presumed to Cover All

Workers compensation policy is "presumed to cover all the employees...of the insured.";

The Indiana statute IC 22-3-5-5 specifies that a workers compensation policy is "presumed to cover all the employees and the entire compensation liability of the insured." Also, the Basic Manual Rule 3.A.5.b. states that "All locations and operations of the employer in a state must be insured on one policy if required by the state workers compensation law."
 
The Indiana Code is available on the State of Indiana website at this address: http://www.state.in.us/legislative/ic/code/.
 
Often agents and carriers believe they can split certain exposures of one legal entity. For instance, they may wish to cover aircraft operations on one policy and the normal business on another policy, or split departments under separate policies. The law as shown above does not permit this.
 
The legal way to accomplish a split in coverages within a state is to create separate legal entities and insure each legal entity's exposure on a separate policy. However, if common ownership exists, the experience of each entity will be combined under one experience rating modification.
Designated Workplace Exclusion Endorsement WC 00 03 02
Although this endorsement is filed and approved for use on Indiana policies, there exists a potential conflict with the Indiana Statute.  Carriers have sometimes used this endorsement to exclude, for example, activities insured on a separate wrap-up or OCP policy.  While there may be value in documenting the intent of the wrap-up policy via WC 00 03 02, the policy could be called upon if the wrap-up policy is not in force, at the time of the employee injury, due to a cancellation or the insolvency of the issuing carrier. 

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The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.