Agents: What you and Your Clients Need to Know about Named Insureds on Workers’ Compensation Policies

Most policy management problems, including coverage and premium audit issues, arise from discrepancies related to how Named Insureds are listed on policies. A Named Insured is a legal entity that EMPLOYERS® has agreed to cover and has been endorsed onto a policy. To help avoid problems, it is important that at the time of application, you confirm the following for each Named Insured:

• The accurate legal entity name is listed on the application (the legal entity name would be the name used in the execution of official business documents, such as IRS filings and business licenses.
• The assigned unique Federal Employer Identification Number (FEIN).
• In the instance of multiple Named Insured submission, ownership details including names, titles and ownership percentage, as well as combinability status of all requested Named Insureds.

More Helpful Information about Named Insured(s)

• DBAs (Doing Business As) or trade names are not acceptable as Named Insured entries. Additionally, the use of “et. al” or “group of companies ” is usually a red flag that an entered applicant’s name is not a filed legal name.
• The workers’ compensation policy only provides coverage for injured employees of scheduled Named Insured(s).
• Only scheduled Named Insureds will be reported for proof of coverage to those state agencies that monitor the insured/uninsured status of business owners with employees.
• Coverage does not extend to any entity other than the scheduled Named Insured(s), even when there is co-mingling of the other legal entity’s payrolls and/or addresses with a Named Insured’s application information.
• If a claim occurs, we will verify the employer of the injured individual and confirm it is a scheduled Named Insured. In addition, at the time of a final premium audit, we will audit based on the payroll tax records of the scheduled Named Insured(s).
• Requests to cover additional scheduled Named Insureds will be considered based upon receipt of an application. If combinable, the additional legal entity may be added by endorsement as a Named Insured as of the date we receive and accept the endorsement. Please note that determining combinability of multiple Named Insureds is not the responsibility of the carrier, but of insurance rating and data collection bureaus.
• It is each Named Insured’s responsibility to notify EMPLOYERS on or before the transaction date of any material change of ownership including a whole or partial sale, as a change in ownership may require the underwriting and issuance of a new policy.

If you have any questions, please contact your EMPLOYERS Territory Manager.