What are the Ins and Outs of Indiana Workers’ Compensation Insurance Policies?

Compliance Corner

If you're an Indiana insurer brushing up on what the state requires for policies, you're in luck if you have Simply Research. But, we also provide a few highlights here.

The Form

No insurer shall enter into or issue any policy of insurance under IC 22-3-2 through IC 22-3-6 until its policy form shall have been submitted to and approved by the department of insurance.

The Coverage

All policies of insurance companies and of reciprocal insurance associations insuring the payment of compensation under IC 22-3-2 through IC 22-3-6 are conclusively presumed to cover all the employees and the entire compensation liability of the insured. Any provision in any policy attempting to limit or modify the liability of the company or association issuing the same shall be wholly void.

Automatically Included

Every policy of any such company or association is deemed to include the following provisions and any change in the policy which may be required by any statute enacted after May 21, 1929, as fully as if they were written in the policy:

(1) The insurer hereby assumes in full all the obligations to pay physician's fees, nurse's charges, hospital services, hospital supplies, burial expenses, compensation, or death benefits imposed upon or accepted by the insured under the provisions of IC 22-3-2 through IC 22-3-6.

(2) This policy is made subject to IC 22-3-2 through IC 22-3-6 relative to the liability of the insured to pay physician's fees, nurse's charges, hospital services, hospital supplies, burial expenses, compensation, or death benefits to and for the employees, the acceptance of such liability by the insured, the adjustment, trial, and adjudication of claims for such physician's fees, nurse's charges, hospital services, hospital supplies, burial expenses, compensation, or death benefits, and the liability of the insurer to pay the same are and shall be a part of this policy contract as fully and completely as if written in this policy.

(3) As between this insurer and the employee, notice to or knowledge of the occurrence of the injury on the part of the insured (the employer) shall be notice or knowledge thereof, on the part of the insurer. The jurisdiction of the insured (the employer) for the purpose of IC 22-3-2 through IC 22-3-6 shall be the jurisdiction of this insurer. This insurer shall in all things be bound by and shall be subject to the awards, judgments, and decrees rendered against the insured (the employer) under IC 22-3-2 through IC 22-3-6.

(4) This insurer will promptly pay to the person entitled to the same all benefits conferred by IC 22-3-2 through IC 22-3-6, including physician's fees, nurse's charges, hospital services, hospital supplies, burial expenses, and all installments of compensation or death benefits that may be awarded or agreed upon under IC 22-3-2 through IC 22-3-6. The obligation of this insurer shall not be affected by any default of the insured (the employer) after the injury or by any default in giving of any notice required by this policy, or otherwise. This policy is a direct promise by this insurer to the person entitled to physician's fees, nurse's charges, fees for hospital services, charges for hospital supplies, charges for burial compensation, or death benefits, and shall be enforceable in the name of the person.

(5) Any termination of this policy by cancellation shall not be effective as to employees of the insured covered hereby unless at least 10 days prior to the taking effect of such cancellation, a written notice giving the date upon which such termination is to become effective has been received by the worker's compensation board of Indiana at its office in Indianapolis, Indiana.

(6) This policy shall automatically expire one year from the effective date of the policy unless:

(A) The policy covers a period of three years, in which event, it shall automatically expire three years from the effective date of the policy;

(B) The policy is issued as a continuous policy, in which event it shall not expire until terminated by the insured or the insurer in accord with applicable state law and applicable policy provisions; or

(C) The policy covers a period permitted in bureau rules under IC 27-7-2-20.

Terminating a Policy

The termination of a policy shall be effective as to the employees of the insured covered by the policy.

Refusal to Pay

All claims for compensation, nurse's charges, hospital services, hospital supplies, physician's fees, or burial expenses may be made directly against either the employer or the insurer or both, and the award of the worker's compensation board may be made against either the employer or the insurer or both. If any insurer shall fail or refuse to pay final award or judgment (except during the pendency of an appeal) rendered against it, or its insured, or, if it shall fail or refuse to comply with any provision of IC 22-3-2 through IC 22-3-6, the board shall not accept any further proofs of insurance from it until it shall have paid the award or judgment or complied with the violated provision of IC 22-3-2 through IC 22-3-6.

Case Examples

Sims v. United States Fidelity & Guaranty Company, No. 49S02-0105-CV-229 (Ind. 01/28/03). Unlike other tort claimants, a worker covered under the Workers' Compensation Act is absolutely assured of compensation provided the injury was by accident and arose out of and in the course of employment. Too, the act imposes obligations on worker's compensation carriers that are unique within the insurance industry. For example, an employer's notice or knowledge of an employee's injury is imputed to the worker's compensation carrier; the worker's compensation carrier is obligated to pay benefits to an injured employee regardless of any default by the employer after the injury occurred; and the employer is required to give 10 days' notice to the Worker's Compensation Board before a worker's compensation carrier can terminate an employee's coverage.

Jones v. Indiana Farmers Mutual Insurance Company, No. 93A02-0908-EX-812 (Ind. Ct. App.05/05/10). The statute is intended to protect workers and employers by requiring advanced notice to the employer that its policy is going to be cancelled. This allows the employer time to secure alternate coverage and gives the Workers' Compensation Board the opportunity to insure that the employer complies with the provisions of the act.

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