It is becoming more common for construction workers to travel out of state for large projects specially to states where severe weather such as hurricanes or wildfires are common. Travel such as this can add additional risk for the contractor sending the employees. This brings up an important question about insurance challenges. Are employees covered under workers’ compensation when traveling out of their home state? In most cases, yes. If your company’s workers’ compensation is through one state, employees are still covered when working out of state through extraterritorial coverage however there are nuances that will be addressed.
How it works
Extraterritorial is a type of coverage that allows workers’ compensation coverage from a workers’ home state continue to apply when working in another state. The insurance coverage will cover the injury just like it would in their home state but may only pay the max loss benefit of the state where the employee holds the coverage.
Another way a worker can be covered state to state is under extraterritorial reciprocity. If your workers’ compensation policy has “All States Coverage” or lists specific states, employees are covered under the other state’s benefits. However, some states such as Florida require that your existing policy specifically Florida as a state under section 3A.
An exception to these rules is if the employee has been working in the state long enough to be considered a resident under their laws. In this case, the workers’ compensation policy would need to be updated to include that state.
As each state has their own laws, it’s important to notify your insurance broker and review your company’s workers’ compensation policy before sending an employee on an out of state project to know how you are covered in case of injury.
For more information on out of state workers’ compensation policies, contact a Marsh McLennan Agency (MMA) advisor.