What it does
WC 00 03 08 (Ed. 4-84) states that the policy does not cover bodily injury to any person described in its Schedule (partners, officers or others). Their remuneration is removed from the premium basis, and the insured must reimburse the insurer for any payment it is required to make because of injury to them.
Who needs it
Businesses whose owners or officers are eligible to exclude themselves under the state act and have elected to do so. The North Carolina bureau's instructions say the endorsement is used when an individual has elected under the act not to be covered, and to exclude employers liability where the insured is statutorily exempt. Eligibility rules differ by state; for example, the Texas manual's version (WC 42 03 08) allows exclusion of executive officers with at least 25% ownership, and of officers with less at the insurer's option.
Key provisions
- Individuals may be named or described, for example "all partners," "all executive officers except the president," or each person named in Item 4.
- Because of the reimbursement clause, if a state later rules that the exclusion was invalid and the insurer pays, the insured owes the money back.
Quoting and selling notes
- Where the state requires a written election or rejection form, get it completed and filed before binding; the endorsement only records an election that was properly made.
- Excluded owners have no workers compensation and no employers liability for their own injuries. Make sure they understand their health and disability insurance must respond instead, and that some contracts require owners to be covered.
- Excluding officers lowers payroll and premium, which can matter for small accounts near minimum premium.
Related forms
Inclusion endorsement WC 00 03 10; domestic and agricultural exclusion WC 00 03 15.
