07 Sep By Land, By Air, or By Sea – Workers’ Comp and the Traveling Employee
Generally, workers’ compensation benefits do not cover injuries unless they happen “in the course and scope of employment.” Consequently, workers’ compensation insurance doesn’t normally cover an employee while they commute to and from work. However, several exceptions exist and in a few recent cases they’ve affected court decisions.
Employees may claim benefits if their travel falls within one of the following exceptions:
- If they’re a traveling employee who does not have a fixed place of employment;
- If the employer sends an employee on a special assignment that requires travel;
- If the employee’s contract includes transportation to and from work;
- If special circumstances cause an employee injury while furthering the interests of the employer.
In several recent cases, these exceptions resulted in decisions favoring the claimants. What is clear is the “coming and going” rule is no longer the sole deciding factor. The courts often consider the events surrounding the injuries, too.
Several recent cases show that these exceptions can increase workers’ compensation liability if employers do not understand their responsibilities. For instance, a recent case in the Commonwealth Court awarded the claimant compensation, even though he had a motor vehicle accident while commuting to work.
The employee was the director of maintenance services, with regular work hours and on salary. Occasionally, the employer would ask him to visit one of their sites outside of his normal hours to maintain their security cameras, vital to company business.
On the day of the accident, the employee felt ill and intended to take the day off. The employer called and asked him to go to a site to take care of a security camera emergency and then take the rest of the day off. On his way to the site, the employee became nauseous, veered off the toad, and struck a telephone pole. He sustained serious injuries.
The judge concluded the employee would not have made the trip but for the emergency. Consequently, the exemption for special circumstances applied and the judge awarded benefits. The employee’s trip furthered the interests of the employer.
One-third of U.S. workers travel on business and these employees face more risks. Sales representatives, drivers, flight attendants, workers in the oil industry, and others operate in many locations outside of employer control. However, employers can outline safe practices in a company travel policy so employees avoid common injuries while reducing their liability risk.
For instance, a company travel policy for drivers may stipulate the number of continuous travel hours allowed or ban cellphone use while driving. By clearly defining job duties and limitations, companies minimize their exposures and detail what is within the scope of their employment. If an activity deviates from these duties and the overall purpose of the trip, it becomes non-compensable.
Proper Insurance Coverage
Employers may not realize that out of state employee injuries could leave them very vulnerable to lawsuits without proper insurance coverage. When employees work outside of the company’s domiciled state, they must disclose this to their insurance carrier. Otherwise, their workers’ compensation insurance policy may exclude amounts beyond their home state’s coverage.
In one recent case, an employee injury in Hawaii led to a workers’ compensation claim. Workers’ compensation allows benefits under either state’s system (the business’s home state or the state in which the accident took place), and in this case, the benefits were much higher in Hawaii than the home state. Unfortunately, the company did not disclose the out-of-state work so the insurance carrier would only pay the lower amount from the home state.
The case went to court, and the judge ruled that the company did not have sufficient coverage for Hawaiian standards. Consequently, the employee pursued the employer for more money in the Hawaiian courts. The employer did not travel to Hawaii and the court awarded a $1.5 million default judgment against the employer. This expensive judgment could have been easily avoided with an “other state coverage” endorsement on the company’s existing policy.
Businesses with traveling employees need a comprehensive travel policy which details employee duties. More importantly, they need the expert advice of an insurance risk manager who can highlight possible issues and recommend solutions. Managing risk includes consultation, diagnosis, and proactive planning. Gilbert’s Risk Solutions’ has helped business for over 160 years, and we’re here for you too.