1. Forms
2. WC
3. WC-00-01-02

What the form is

The WC 00 01 02, Federal Coal Mine Health and Safety Act Coverage Endorsement, is an endorsement to the standard Workers Compensation and Employers Liability Insurance Policy. Its primary purpose is to extend coverage to include the obligations imposed on employers by the Federal Coal Mine Health and Safety Act (FCMHSA). This act specifically addresses compensation for coal miners who develop pneumoconiosis, commonly known as "Black Lung" disease, due to their occupational exposure to coal dust. The endorsement ensures that the insurance policy complies with the federal requirements for providing benefits to these workers.

Classes of business it applies to

This endorsement is specifically designed for employers engaged in coal mining operations. This includes businesses involved in:

• Underground coal mining
• Surface coal mining
• Coal preparation plants

Real-world example: A company that operates several coal mines in Appalachia would need this endorsement on their Workers Compensation policy to cover their liability for potential Black Lung claims from their mining employees.

Special considerations

Key considerations for this endorsement include:

• Mandatory Coverage: For employers whose operations fall under the FCMHSA, this coverage is not optional if they wish to insure this exposure. Standard Workers Compensation policies might exclude or not adequately cover these federally mandated benefits.
• Federal Jurisdiction: Claims under the FCMHSA are subject to federal law, which can differ significantly from state workers' compensation laws in terms of eligibility, benefit levels, and adjudication processes.
• Long Latency Period: Black Lung disease can take many years to develop and manifest. This creates long-tail liabilities that insurers and employers must consider.
• Statutory Benefits: The benefits payable under this endorsement are those prescribed by the Federal Coal Mine Health and Safety Act.

Real-world example: An underwriter reviewing an application for a coal mining company must verify that this endorsement is included. If the company has a history of Black Lung claims, this will significantly impact the underwriting and pricing of the policy.

Key information for agents and underwriters

Agents and underwriters should be aware of the following:

• Risk Identification: It is crucial for agents to accurately identify clients involved in any form of coal mining to ensure this endorsement is offered and attached to the policy.
• Underwriting Assessment: Underwriters need to evaluate the specific risks associated with the insured's coal mining operations. This includes reviewing their safety protocols, dust control measures, employee screening programs, and historical claims data related to respiratory illnesses.
• Premium Implications: The premium for this endorsement will reflect the significant and specialized risk associated with Black Lung disease. Rates are typically developed based on the specific exposures of coal mining operations.
• Coverage Gaps: Failing to include this endorsement for an eligible coal mining operation can result in a severe coverage gap, leaving the employer responsible for substantial federal benefit payments and potential penalties. This also represents a significant errors and omissions (E&O) exposure for the agent.
• Interaction with State Benefits: While this endorsement addresses federal obligations, employees might also have rights under state workers' compensation laws. The interplay between federal and state benefits can be complex.