Next Steps After Workers’ Compensation Lapse
Has your business experienced a lapse in Workers’ Compensation coverage? Here’s what you should know.
What is a Lapse in Coverage?
When a business has a lapse in Workers’ Compensation coverage, it means they are temporarily without coverage to protect their employees and their business. A lapse in coverage can have many causes, including:
- Failure to pay premiums
- Payroll or administrative errors, like improperly classified employees
- Business changes, like moving to a new state
- Regulatory changes
- Poor risk management or a high rate of workplace accidents
If your business has a lapse in Workers’ Compensation coverage, it can have many consequences, ranging from fines to an increased risk of employee injuries. If you have a lapse in coverage, it’s important to quickly remedy the issue and find the coverage you need to protect your business and your employees.
The Next Steps
After a lapse in Workers’ Compensation coverage, your business should follow these steps:
Take Immediate Action
- Since a lapse can have so many costly and dangerous consequences, it’s important to take swift action to reinstate Workers’ Compensation coverage. To work toward reinstating your coverage, you should notify your insurance carrier about the lapse, as well as notify any regulatory authorities. To reinstate your coverage, you might need to pay fines for compliance violations, pay outstanding premiums, or meet other requirements from your carrier or regulatory agency.
Find the Cause
- You should also look into the cause of your lapse in coverage. For example, was it caused by a payroll error or another internal mistake? Could it have been prevented? By identifying the cause, you can take steps to prevent the same issue from occurring in the future.
Look for New Liabilities
- When you have a lapse in coverage, you might open your business up to new risks, vulnerabilities, and liabilities. For example, you might see more workplace injuries during a period of lapsed coverage. Identify any new risks around your workplace, then take quick steps to mitigate them and prevent them from occurring in the future.
Review Internal Procedures
- A lapse in coverage is a reason to review your internal procedures, especially when it comes to insurance and important documentation like employee classification. You should also review your policies on employee safety and regulatory compliance.
Have a Plan
- Hopefully, your business learns from a lapse in coverage and can avoid the same issues from occurring again. However, it’s still important to create a contingency plan for if a lapse in coverage does occur again.
Getting Help After a Lapse in Coverage
Even if you take all the right steps to remedy a lapse in Workers’ Compensation, lapsed coverage can make it harder for businesses to secure the Workers’ Compensation coverage they need to protect their business and employees. At Work Comp Business Insurance Solutions, we offer products to assist businesses with lapsed coverage, including Workers’ Compensation and risk management assistance.
At Work Comp Business Insurance Solutions, we help business owners find the best Workers’ Compensation and payroll solutions.To learn more about our services and how we can help your business, visit us online at https://www.wcbis.com.
