Most employers are required to provide workers compensation insurance. Common sense might suggest shopping around for the best policy, but this strategy is not possible if you live or work in a monopolistic state. Here is a list of monopolistic states and the implications for employers doing business in one.
In some states, the government creates and maintains funds to provide insurance for its citizens, and does not allow private companies to offer competing policies. The most common type of state-owned fund is workers” compensation, although others exist. The following are the six monopolistic states and territories:
- North Dakota
- Puerto Rico
- S. Virgin Islands
Previously, West Virginia and Nevada also were monopolistic states. Nevada stopped in 1999, and West Virginia in 2008. Texas is unique in that it does not require employers to carry workers’ compensation insurance.
Employers who do business in multiple states must buy a policy from any monopolistic ones, no matter what other coverage they have. It also is a good idea for them to have a stop-gap policy, in case they are found negligent after an employee is injured or becomes sick on the job. Stopgap is usually part of general liability coverage, rather than a stand-alone policy.