Pennsylvania House lawmakers have approved new legislation that would allow insurers to write workers’ comp coverage to owners and principals of businesses.
Agents in the state had sought the change to correct a potential gap in coverage — particularly for contractors and similar self-employed business owners who are currently ineligible to buy workers comp for themselves.
Under the change, which was approved by the house in early May, insurance laws in the Keystone State would be modified to allow coverage for sole proprietors, partners of a partnership or officers of a limited liability company.
Agents who testified before lawmakers said that the potential business and personal losses for owners outweighed concerns over the potential for frauf, which was traditionally a reason for banning the coverage.
The law could also have a major impact on small insurance agencies, in which principals are generally not allowed to purchase the coverage for themselves.
The Insurance Agents & Brokers Group in Pennsylvania (IA&B) praised the legislation, which now heads to the Senate.
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