When it comes to worker’s compensation insurance, most Property, Casualty, and Commercial Lines Advisors tell me about the majority of Business Owners who “opt out” of their worker’s compensation insurance because it just doesn’t make sense to include their income in the calculation for premium.
The good news for partnerships and corporations is that the new State Bill 189 California Ruling effective July 1st 2018 sets the new ownership threshold at 10% (formerly 15%), as to determine which partners or members of a company’s board of directors are eligible to waive worker’s compensation insurance coverage.
State Bill 189 authorizes officers and members of the board of directors of a corporation organized pursuant to CA Corp Law 12200, to execute a document in writing and under penalty of perjury to waive their rights under the laws governing California’s worker’s compensation by stating that they are covered by both a Health Care Service plan AND a Disability insurance policy that is comparable in scope to workers compensation.
Insurance agents are overlooking the requirement that mandates the owners waiving their right to worker’s compensation to secure Disability coverage that is comparable in scope to workers compensation, leaving their clients out of compliance and subject to penalties.
The benefits under most typical disability policies are not generally comparable in scope to those under a California worker’s compensation policy. Unlike most Disability policies, California worker’s compensation insurance provides liberal benefits and reimbursement for certain expenses that arise in connection with a claim – such as mileage reimbursement and Job Displacement benefits.
CPS Insurance Services works with insurance carriers that do offer additional benefits and riders which can look and feel a lot like benefits under workers compensation.
They can offer additional benefits for Home Modification, Vocational Rehabilitation, Survivor Benefits, Lifetime benefits for Presumptive Total Disability and many others.
The opportunity is to automatically present the alternative DI coverage to your clients who “opt out” of their workers compensation policy at the time of their renewal. Individual Disability Income does not just cover your client for on the job injuries – it is a 24 hour a day benefit for both accidents and sicknesses.
I have found in most blue-collar occupations we are able to save the business owner considerable premium by offering individual income protection plan and moderate savings for white collar occupations.
The Council for Disability Awareness (http://disabilitycanhappen.org/disability-statistic) states only 5% of disabilities are as a result of, “on the job” injuries. The other 95% of disability claims are a result of a major illnesses or accidents “off the job”.
Do your business clients a favor and contact the CPS Disability Dept. prior to their clients’ worker’s compensation renewal after July 1st. Click HERE to download a copy of the DI proposal request – to submit to CPS prior to your clients’ renewal.