When a New York-based contractor accepts a project in neighboring New Jersey, several complexities arise, especially concerning workers’ compensation insurance. Consider a scenario where a contractor, whose workers’ compensation policy lists only New York under Item 3A of the policy declaration page, undertakes a short-term project in New Jersey. The contractor employs workers, some residing in New Jersey. If a New Jersey-based worker sustains a serious injury on the job and is hospitalized in New Jersey, several critical questions emerge:
- Which state’s laws govern the workers’ compensation claim?
- If New Jersey’s benefits are more generous than New York’s, is the contractor liable for the difference if the policy covers only New York laws?
- How can the contractor ensure proper coverage for future out-of-state projects?
Determining Applicable State Laws for the Claim
Workers’ compensation laws are state-specific, and coverage is typically determined by factors such as the state where the injury occurred, the state of employment, and the terms outlined in the insurance policy. In this scenario:
- Location of Injury: The injury occurred in New Jersey, making New Jersey’s workers’ compensation laws relevant.
- Employee Residency: The injured worker resides in New Jersey, further connecting the claim to New Jersey.
- Policy Coverage: The contractor’s policy lists only New York under Item 3A, indicating primary coverage for injuries occurring within New York.
Given these factors, there’s a strong possibility that New Jersey’s workers’ compensation laws would apply to the claim.
Liability for Differences in Benefits
If New Jersey’s workers’ compensation benefits are more generous than those in New York, and the contractor’s policy covers only New York, complications can arise:
- Policy Limitations: A policy listing only New York may not fully cover benefits mandated by New Jersey law.
- Potential Gaps: The contractor could be held responsible for any shortfall between what the New York policy covers and what New Jersey law requires.
This situation underscores the importance of ensuring that workers’ compensation policies are appropriately structured to cover out-of-state work.
Ensuring Proper Coverage for Future Projects
To prevent such issues in future out-of-state projects, contractors should:
- Policy Review and Adjustment:
- Include Other States Endorsement: Ensure the policy includes an “Other States” endorsement, listing states where work is anticipated. This endorsement can provide automatic coverage for incidental exposures in states not specifically listed in Item 3A.
- Add Specific States to Item 3A: For projects in states with stringent workers’ compensation requirements, like New Jersey, it’s advisable to list the state explicitly in Item 3A to guarantee full statutory coverage.
- Consult with Insurance Specialists:
- Seek Expertise: Engage with insurance professionals who specialize in multi-state workers’ compensation to navigate the complexities of varying state laws and ensure comprehensive coverage.
BGES Group: Workers’ Compensation Insurance Specialists in the Tri-State Area
For contractors operating in the tri-state area, partnering with knowledgeable insurance specialists is crucial. BGES Group stands out as a leading provider of workers’ compensation insurance solutions tailored to the unique needs of contractors in New York, New Jersey, and Connecticut.
About BGES Group
BGES Group offers one-stop shopping for all construction insurance needs, with a particular focus on workers’ compensation across various industries. They represent top-tier programs and specialize in delivering prompt, effective solutions. Clients benefit from personalized service, leveraging over 44 years of industry experience.
Services Offered:
- Comprehensive Insurance Programs: Access to a wide range of coverage options tailored to the construction industry.
- Policy Audits: Review of past workers’ compensation policies to identify errors and secure potential refunds.
- Risk Management: Assistance with screening subcontractors’ insurance, contract reviews, and risk transfer strategies.
Client Testimonials:
Clients consistently praise BGES Group for their responsiveness and expertise. For instance, Mike from BAC Construction notes, “Whenever we need anything we get it in minutes. Whenever we have questions we get the president on the phone within seconds and he has tremendous knowledge.”
Contact Information:
- Owner: Gary Wallach
- Phone: (914) 806-5853
- Email: bgesgroup@gmail.com
- Website: https://bgesgroup.com
By collaborating with specialists like BGES Group, contractors can ensure they have the appropriate workers’ compensation coverage, mitigating risks associated with out-of-state projects and safeguarding their businesses against potential liabilities.