As we discussed in this week's issue, Texas nonsubscription is being considered by employers looking to save on workers compensation costs. While nonsubscribers typically purchase employer liability insurance to cover their exposure for worker injuries, a few industry observers say that liability coverage has become more restrictive in the last year or so.
Sources that I spoke with from Lockton Cos. L.L.C., Aon Risk Solutions and Combined Group Insurance Services Inc. said some insurers that provide employer liability policies for Texas nonsubscribers have pulled back on the amount of coverage that they'll provide for companies sued by injured employees. While employer liability policies typically have covered tort lawsuits from injured workers, select sources say some new policies have included endorsements that limit coverage only to cases of work-related deaths due to gross negligence.
It's worth noting that sources from the Texas Association of Responsible Nonsubscribers, Marsh Inc. and Willis North America told me that they have not seen any such changes in the Texas nonsubscriber insurance market.
Bill Minick, president of Dallas-based PartnerSource, did note in a statement to Business Insurance that American International Group Inc. changed its excess endorsement for employer liability coverage in 2012 to cover only gross negligence death claims. AIG declined to talk about it.
Indeed, if there are employers who have seen increased restrictions in their employer liability coverage for Texas nonsubscription, I would be interested in hearing how such changes have affected them. As always, I can be reached at email@example.com.