Compliance with this law has become difficult for some businesses—one member’s horror story.
State law requires that all New
Jersey employers not covered by federal programs have workers’ compensation
coverage or be approved for self-insurance, and even out-of-state employers may
need workers’ compensation coverage if an employment contract is entered into
in New Jersey or if work is performed in New Jersey.
However, compliance with this law
has become difficult for some businesses.
Bob Matland, for example, has held
workers’ compensation coverage for many years with no claims. His business,
Black Belt Institute, a martial arts studio, has been operational in Metuchen
since 1993. The company offers Tae Kwon Do lessons for ages 4 and up, Kung Fu
lessons for ages 5 and up and adult programs like yoga, Zumba, KickFit Boxing
and tai chi.
However, at the end of 2013, when
his workers’ compensation insurance was due for renewal, he was informed by his
insurance company that they no longer offered coverage for his
industry. He contacted his broker who had no
other options. He was then forced to go with a different local broker, but under assigned risk. That required a 17 percent surcharge.
He then contacted the state and was told he had to pay the 17 percent “penalty”
as a result of the risk of his industry. Eventually, Matland found another insurance
company who could write the policy without the surcharge, but he was still
forced to spend time and resources dealing with this issue rather than running
his business.
“Due to the state allowing insurance
companies to pick and choose who they will write for, I incurred additional
cost for this coverage in an already depressed economy,” Matland says. “As with
auto insurance some years ago, the state should require that insurance
companies provide fair pricing for all industries if they wish to provide any
insurance in New Jersey. There should be no discrimination based on type of
business.”
