Workers' Compensation Insurance Required of All Commercial Contractors

By Cece Newell, Property and Casualty Technician

Effective July 1, 2010 contractors that hold any one of the four commercial contractor endorsements with the Construction Contractors Board (CCB) must obtain workers' compensation insurance. Commercial contractors who previously qualified as "exempt" will need to purchase workers' compensation insurance as a result of a change in the law in House Bill 3242 passed by the 2007 Legislature.

If you have clients that are commercial contractors, you will want to be aware of this change. You can find additional information about this law and who is required to purchase workers' compensation insurance by calling the Construction Contractors Board at 503-378-4621 or visiting their Web site at www.oregon.gov/CCB .

How to help your contractor clients

SAIF Corporation has developed an underwritten workers' compensation insurance program in response to HB 3242. The contractor may contact SAIF's Service Center toll free at 800-848-2373 or by email, servicecenter@saif.com. Information is also available on SAIF's website: www.saif.com. SAIF is not required to accept every contractor who applies for coverage.

If the contractor can not find coverage with SAIF or another voluntary market insurer, they are eligible for coverage in the Workers' Compensation Insurance Plan, Oregon's assigned risk plan. A casualty licensed producer can assist them with this step. The contractor must have proof that one insurance company has declined to provide coverage. It will be necessary to complete an assigned risk plan application. The application to the declining insurer can not be reused.

You should know that each application to the assigned risk plan enters into the Voluntary Coverage Assistance Program (VCAP), which attempts to match employers with participating voluntary market insurers. Your insured may receive a voluntary offer from this plan usually at premium less than the assigned risk plan. If the application does not qualify for voluntary market coverage, the contractor will be assigned to a plan insurance carrier. Oregon has three assigned risk plan carriers. They are SAIF, Liberty Northwest, and Travelers Indemnity.

You can help the contractor complete a new application to apply for coverage in the assigned risk plan. The application can be submitted by the prospective insured, or by the producer using one of the options below:

1. RMAPS Online Application Service - You or your agent or broker can enter ACORD 130/133 application information online. The National Council on Compensation Insurance (NCCI) provides this free electronic service to submit business in the state-approved workers' compensation insurance plan. Contact the NCCI customer service center toll-free at 800-NCCI 1-2-3 (800-622-4123) for access. NCCI also has a Web site at www.ncci.com.
2. Mail submission - You or the prospective insured may submit hard copies of the ACORD 130 and ACORD 133 forms to the address below:

   NCCI, Inc.- Oregon
   P.O. Box 74619
   Chicago, IL 60675-4619

3. Telephone submission - The prospective insured or the producer can use NCCI's toll-free number (800-NCCI 1-2-3) to submit an application by providing the ACORD 130 and ACORD 133 application information over the phone to an NCCI account analyst.

If you need information relating to classification codes, rates, experience modification factors, etc., please contact the NCCI Customer Service Center toll-free at 800-NCCI 1-2-3 (800-622-4123).

For information on how to obtain workers' compensation insurance, contact the Small Business Ombudsman for Workers' Compensation. Call 503-378-4209 or e-mail questions to jan.l.bissell@state.or.us or david.waki@state.or.us. For questions on who needs the insurance, contact the CCB at 503-378-4621.