Agents in Pennsylvania are urging lawmakers to pass legislation that would allow insurers to cover owners or partners of small businesses through a workers’ compensation policy.
The legislation changes insurance laws to allow coverage for sole proprietors, partners of a partnership or officers of a limited liability company — situations where it’s not currently allowed. The coverage gap impacts agents in two ways, said Kari Kissinger, director of government affairs at the Insurance Agents & Brokers (IA&B): Agents can’t sell it to their clients, nor purchase it.
The change lets insurers write the coverage, although it does not require them to do so.
Similar legislation was introduced to the general assembly last year, but failed. Kissinger, who testified about the bill during a recent hearing at the labor and industry committee of the house of representatives, said she expects the bill to have slightly more traction this year and is optimistic about its passage.
“Insurers have supported it in the past and we anticipate that they will be do the same this session,” she said.
Some agents say the lack of available coverage can create problems for their clients, particularly those with stringent risk management guidelines.
“We run into problems when our clients want to use consultants or small contractors,” said Norm Basso, COO of EK McConkey & Co., a 60-employee, York-based agency specializing in larger commercial accounts. “Risk management practices require our clients to get certificates of insurance from them. But those consultants and small contractors can’t buy it.”
There’s also the issue of filling an important insurance gap, Basso said. He has seen cases in which small business owners are injured on the job and — because they were ineligible for workers’ comp coverage — suffered significant losses to their business and personal wealth.
“I would like to see business owners have the opportunity to buy that coverage,” said Basso, who also testified at the hearing.
Topics Agencies Legislation Commercial Lines Workers' Compensation Business Insurance Pennsylvania
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