The national Workers Compensation guide covers the standard workers compensation and employers liability policy and how it is rated in most states. Washington is different. It is one of the four monopolistic states (with North Dakota, Ohio and Wyoming), so private insurers don't sell workers compensation here. This guide covers Washington's industrial insurance system under Title 51 RCW, run by the Department of Labor and Industries (L&I).

How employers get coverage (RCW 51.14.010)

An employer has two choices:

1. insure with the state fund run by L&I, or
2. qualify with L&I as a self-insured employer

L&I states that Washington does not allow private workers compensation insurance.

Self-insurers (RCW 51.14.020):

• must show the financial ability to make prompt payment of all compensation and assessments
• post security at least equal to normal expected annual claim liabilities, and never less than $100,000
• may reinsure up to 80% of their liability, but the reinsurer can't administer the program

The no-fault bargain (RCW 51.04.010)

Industrial insurance gives injured workers "sure and certain relief" regardless of fault. In exchange, it replaces all other remedies. Civil lawsuits against the employer for covered injuries are abolished except as Title 51 provides. Benefits include medical treatment and wage replacement (time-loss).

Who is covered (RCW 51.12.020)

Coverage is mandatory for employees, with these exceptions:

• sole proprietors and partners, who may elect coverage
• domestic servants in a private home when the employer has fewer than two employees working 40 or more hours a week there
• insurance producers and licensed surplus line brokers
• corporate officers: a non-public corporation may exempt up to eight bona fide officers who are shareholders with substantial control, or any number if all are related

Premiums (chapter 51.16 RCW)

• L&I classifies occupations by degree of hazard. Premiums are based on the industry class and the hours employees work (RCW 51.16.035).
• State fund employers file quarterly payroll reports and pay premiums by the last day of January, April, July and October (RCW 51.16.060).
• Employers deduct one-half of the medical benefits premium from workers' wages (RCW 51.16.140). Deducting any other part of the premium is a gross misdemeanor.

Benefits

There is no compensation for the day of injury and the three days after unless the disability lasts seven consecutive calendar days (RCW 51.32.090(7)).

Penalty for not securing coverage

An employer that fails to secure coverage pays a penalty of 50% to 100% of the cost of the injury or occupational disease (RCW 51.48.010).

Related insurance rules

• The Washington Insurance Guaranty Association doesn't cover workers compensation, except longshore and harbor workers' compensation insurance (RCW 48.32.020).
• Washington's surplus lines law expressly excludes industrial insurance under Title 51 (RCW 48.15.040(1)).
• A Washington disability income policy may exclude sickness covered by workers compensation (WAC 284-50-315(5)).

Common exam traps

• Washington is monopolistic. The options are the state fund or self-insurance. Private carriers can't write it.
• The system is called industrial insurance and is run by L&I, not the Insurance Commissioner.
• Workers pay half of the medical benefits premium through payroll deduction. No other deduction is allowed.
• Premiums are based on hours worked and risk class, reported quarterly.
• Sole proprietors and partners are excluded but may elect coverage.
• Self-insurer security is at least $100,000.
• The waiting period is the day of injury plus 3 days, paid back if disability lasts 7 days.