Pennsylvania Ponders Workers’ Comp for Small Business Owners

By | March 23, 2011

Agents in Pennsylvania will urge lawmakers today 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 in the state to allow coverage for sole proprietors, partners of a partnership or officers of a limited liability company.

“It is pretty much common sense legislation,” said Kari Kissinger, government affairs director for the Insurance Agents & Brokers Group in Pennsylvania (IA&B).

The lack of available coverage impacts agents in two ways, she said, since agents cannot offer those products for their clients and many agents cannot purchase it for themselves.

The legislation authorizes insurers to write the coverage, although it does not require them to do so.

Similar legislation was introduced to the general assembly last year, but failed to make it out of committee. Kissinger, who will testify about the bill during a hearing today 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,” Norm Basso, COO of EK McConkey & Co., a 60-employee, York-based agency specializing in larger commercial accounts. “Risk management practices dictate that our clients need certificates of worker’s comp 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,” Basso said.

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