The recent devastation of Hurricane Sandy has affected the lives of many Americans. Knocking out power, destroying homes and even taking lives – are just a few of the ill-fated consequences of the largest Atlantic hurricane ever recorded in history based in diameter, and the second most expensive in terms of damages. Unfortunately, while America is dealing with the direct effects of Hurricane Sandy, many workers are wondering how a natural disaster would affect workers’ compensation and employers liability insurance. Workers’ compensation should not be overlooked during this time of disaster, especially if you were one of those required to attend work during a state of calamity. Know the implications of a natural disaster on your workers’ compensation premium. Here are some pertinent information you should take note of:
- Change in governing classifications. The National Council on Compensation Insurance states through the Rule 1-F-1 in the Basic Manual for Workers’ Compensation and Employers Liability Insurance that when a natural disaster creates a temporary interruption of normal business activities, this can validate as a change in an insured’s operations, and therefore, can prompt carriers to consider a change in governing classifications if the employer continues to pay its employees (the change is reversed once normal business activities are reinstated). For example, if employees are usually classified as construction workers, Rule 1-F-1 allows the employer to change their classification code to an office clerk classification. This helps employers with their year-end premium audits because construction workers usually require a higher premium payment than an office clerk.
- Involvement in the clean-up effort. Additionally, an employer can change the classification code of their employees when they are involved in the clean-up effort inside and outside of the state. For instance, if tree debris falls on an employer’s property, this allows an employee who normally performs office duties to help in clearing the debris. Employers may apply the following three classifications courtesy of NCCI: Code 0106—Tree Pruning and Removal—All Operations & Drivers—Natural Catastrophe (which applies to risks contracting exclusively to prune limbs, clean up tree debris, and remove lodged or felled trees in the aftermath of a natural catastrophe); Code 6217—Excavation & Drivers (which applies to the removal o14f tree debris using mechanical equipment such as bulldozers and hydro-axes) and Code 2702—Logging or Tree Removal—Non-mechanized Operations (which applies to cutting down and removal of standing trees).
- Financial or nonfinancial grants. In some cases of natural disasters, Rule 2-B-2-I in NCCI Holdings Inc.’s Basic Manual for Workers’ Compensation and Employers Liability Insurance permits employers to provide grants which are considered to be employer-provided perks. Flights and discounts on property or services are a few of the payroll-excluded perks that can be provided to employees who are affected by the disaster.
It should be noted that these changes can only be applied in states where NCCI provides rating services. Nevertheless, in the case of an extreme natural disaster, it is essential for both employers and employees to understand the changes that can apply to the workers’ compensation premium.
If you are having difficulty claiming your workers’ compensation benefits, you may need the help of an experienced workers’ compensation attorney. Call us at 303-780-7329 or click HERE for your FREE CONSULTATION. We have helped injured workers throughout Colorado obtain the Workers’ Compensation and Social Security benefits they deserve for their work injuries. It’s all we do – and we do it very well.
