N.Y. Workers' Compensation Law § 54: The insurance contract

§ 54. The insurance contract. 1. Right of recourse to the insurance

carrier. Every policy of insurance covering the liability of the

employer for compensation shall be issued by one or more stock

companies, mutual corporations or reciprocal insurers authorized to

transact workers' compensation insurance in this state. In the case of a

policy with multiple insurers, such insurers shall share one hundred

percent of the liabilities by subscription, and one of the insurers

shall serve as the lead insurer for notice and cancellation purposes.

Such a policy shall contain a provision setting forth the right of the

chair to enforce in the name of the people of the state of New York for

the benefit of the person entitled to the compensation insured by the

policy either by filing a separate application or by making the

insurance carrier a party to the original application, the liability of

the insurance carrier in whole or in part for the payment of such

compensation; provided, however, that payment in whole or in part of

such compensation by either the employer or the insurance carrier shall

to the extent thereof be a bar to the recovery against the other of the

amount so paid.

2. Knowledge and jurisdiction of the employer extended to cover the

insurance carrier. Every such policy shall contain a provision that, as

between the employee and the insurance carrier, the notice to or

knowledge of the occurrence of the injury on the part of the employer

shall be deemed notice or knowledge, as the case may be, on the part of

the insurance carrier, or if more than one insurer, the lead carrier;

that jurisdiction of the employer shall, for the purpose of this

chapter, be jurisdiction of the lead insurance carrier and that such

insurance carrier shall in all things be bound by and subject to the

orders, findings, decisions or awards rendered against the employer for

the payment of compensation under the provisions of this chapter.

3. Insolvency of employer does not release the insurance carrier.

Every such policy shall contain a provision to the effect that the

insolvency or bankruptcy of the employer shall not relieve the insurance

carrier from the payment of compensation for injuries or death sustained

by an employee during the life of such policy.

4. Limitation of indemnity agreements. Every contract or agreement of

an employer the purpose of which is to indemnify him from loss or damage

on account of the injury of an employee by accidental means, or on

account of the negligence of such employer or his officer, agent or

servant, shall be absolutely void unless it shall also cover liability

for the payment of the compensation and for the payment into the special

funds provided for by this chapter. Every such contract or agreement of

insurance issued by an insurance carrier covering the liability of an

employer for the payment of the compensation and for the payment into

the special funds provided by this chapter shall be deemed to include

all employees of the employer employed at or in connection with the

business of the employer carried on, maintained, or operated at the

location or locations set forth in such contract or agreement and

employees for whose injuries a contractor may become liable under the

provisions of section fifty-six of this chapter. Any employee or

employees or class of employees not enumerated in section three,

subdivision one, group one to seventeen inclusive, of this chapter,

employed by a municipal corporation or political subdivision of the

state, may by the terms of the contract or agreement be expressly

excluded therefrom.

5. (a) Cancellation and termination of insurance contracts. No

contract of insurance issued by an insurance carrier against liability

arising under this chapter shall be cancelled within the time limited in

such contract for its expiration unless notice is given as required by

this section. When cancellation is due to non-payment of premiums and

assessments, such cancellation shall not be effective until at least ten

days after a notice of cancellation of such contract, on a date

specified in such notice, shall be filed in the office of the chair and

also served on the employer. When cancellation is due to any reason

other than non-payment of premiums and assessments, such cancellation

shall not be effective until at least thirty days after a notice of

cancellation of such contract, on a date specified in such notice, shall

be filed in the office of the chair and also served on the employer;

provided, however, in either case, that if the employer has secured

insurance with another insurance carrier which becomes effective prior

to the expiration of the time stated in such notice, the cancellation

shall be effective as of the date of such other coverage. No insurer

shall refuse to renew any policy insuring against liability arising

under this chapter unless at least thirty days prior to its expiration

notice of intention not to renew has been filed in the office of the

chair and also served on the employer.

Such notice shall be served on the employer by delivering it to him,

her or it or by sending it by mail, by certified or registered letter,

return receipt requested, addressed to the employer at his, her or its

last known place of business; provided that, if the employer be a

partnership, then such notice may be so given to any of one of the

partners, and if the employer be a corporation then the notice may be

given to any agent or officer of the corporation upon whom legal process

may be served; and further provided that an employer may designate any

person or entity at any address to receive such notice including the

designation of one person or entity to receive notice on behalf of

multiple entities insured under one insurance policy and that service of

notice at the address so designated upon the person or entity so

designated by delivery or by mail, by certified or registered letter,

return receipt requested, shall satisfy the notice requirement of this

section. Provided, however, the right to cancellation of a policy of

insurance in the state fund shall be exercised only for non-payment of

premiums and assessments or as provided in section ninety-four of this

chapter.

The provisions of this subdivision shall not apply with respect to

policies containing coverage pursuant to subsection (j) of section three

thousand four hundred twenty of the insurance law relating to every

policy providing comprehensive personal liability insurance on a one,

two, three or four family owner-occupied dwelling.

In the event such cancellation or termination notice is not filed with

the chair within the required time period, the chair shall impose a

penalty in the amount of up to five hundred dollars for each ten-day

period the insurance carrier or state insurance fund failed to file the

notification. All penalties collected pursuant to this subdivision shall

be deposited in the uninsured employers' fund.

(b) Conditional renewal for carriers under common control. A contract

of insurance shall remain in full force and effect subject to the same

rates as the expiring contract of insurance rates, unless written notice

is mailed or delivered by the insurance carrier to the employer, at the

address shown on the policy, and to such employer's authorized agent or

broker, indicating the insurance carrier's intention to condition

renewal upon issuance of a policy that supersedes a policy previously

issued by another insurance carrier under common control that will

result in an increased premium in excess of ten percent (exclusive of

any premium increase generated as a result of increased loss costs filed

and approved in accordance with subsection (e) of section two thousand

three hundred five of the insurance law, increased exposure units, or as

a result of experience rating, contractor credit adjustment program,

merit rating, retrospective rating or audit or removal or reduction of a

drug free credit, managed care credit, or deductible. Such notice shall

be mailed or delivered at least thirty days in advance of the expiration

date of the policy, and shall set forth the amount of the premium

increase (or, where such amount cannot reasonably be determined as of

the time the notice is provided due to failure of the policyholder to

provide to the insurance carrier the information necessary to determine

the premium, a reasonable estimate of the premium increase based upon

the information available to the insurance carrier at that time).

Nothing in this subdivision shall require the insurance carrier to

provide such notice when the employer, an agent or broker authorized by

the employer, or another insurance carrier of the employer has mailed or

delivered written notice that the policy has been replaced or is no

longer desired.

5-a. Issuance, amendment, endorsement or reinstatement of insurance

contracts. a. Any insurance carrier or the state insurance fund who

issues, reinstates, amends or endorses any contract of insurance or

rider thereto covering the liability of an employer for compensation

under this chapter shall file notification in the office of the chair

within thirty days after such issuance, reinstatement, amendment, or

endorsement of the contract. Such notice shall be filed in the manner

and form prescribed by the chair.

b. In the event notice required under this subdivision is not filed

with the chair within the thirty-day time period, or notice is not

provided by a group self-insured trust pursuant to regulation

promulgated by the board regarding notification of the trust's

commencement or termination of coverage for any employer, the chair may

impose a penalty of up to five hundred dollars for each ten-day period

the insurance carrier or state insurance fund or group self-insurance

trust failed to file the notification. All penalties collected pursuant

to this subdivision shall be deposited in the uninsured employers' fund.

c. The provisions of this subdivision shall not apply with respect to

insurance policies containing coverage pursuant to subsection (j) of

section three thousand four hundred twenty of the insurance law relating

to every policy providing comprehensive personal liability insurance on

a one, two, three or four family owner-occupied dwelling.

6. a. Insurance of officers of corporations. Every executive officer

of a corporation shall be deemed to be included in the compensation

insurance contract or covered under a certificate of self-insurance

unless that person is an unsalaried executive officer of a

not-for-profit corporation or unincorporated association and such

corporation or association elects to exclude that person from the

coverage of this chapter. Such election to exclude such person shall be

made in writing on a form prescribed by the chair and filed with the

insurance carrier. Such election shall be effective with respect to all

of the policies issued to the corporation or association by such

insurance carrier as long as it shall continuously insure the

corporation or association, provided that written notice of the

continuation of the election to exclude any or all executive officers is

given to the corporation or association with each renewal notice of the

policy. If such election is revoked, it shall be in writing on a form

prescribed by the chair, and shall be filed with the chair and the

insurance carrier. Such revocation shall not be effective until thirty

days after such filing. Any executive officer whose corporation or

association files an election not to be included under this chapter

shall be deemed not to be an employee within the intent of this chapter;

however, if not excluded, such officers and their dependents shall be

entitled to compensation as provided by this chapter.

b. An executive officer of any corporation who at all times during the

period involved owns all of the issued and outstanding stock of the

corporation and holds all of the offices pursuant to paragraph (e) of

section seven hundred fifteen of the business corporation law and who is

the executive officer of a corporation having other persons who are

employees required to be covered under this chapter shall be deemed to

be included in the compensation insurance contract or covered under a

certificate of self-insurance unless the officer elects to be excluded

from the coverage of this chapter. Such election shall be made by the

corporation filing a notice that the corporation elects to exclude the

executive officer of such corporation named in the notice from coverage

of this chapter. Such election shall be filed with the insurance carrier

or the chair in the case of self-insurance upon a form prescribed by the

chair of the workers' compensation board. Such election shall be

effective with respect to all policies issued to such corporation by

such insurance carrier as long as it shall continuously insure the

corporation and shall be final and binding upon the executive officer

named in the notice until revoked by the corporation in accordance with

paragraph a of this subdivision.

(c) An executive officer of any corporation who at all times during

the period involved owns all of the issued and outstanding stock of the

corporation and holds all of the offices pursuant to paragraph (e) of

section seven hundred fifteen of the business corporation law and who is

the executive officer of a corporation that has no other persons who are

employees required to be covered under this chapter shall be deemed to

be excluded from coverage under this chapter unless such officer elects

to be covered. Such coverage may be effected by obtaining an insurance

policy or in the case of self-insurance by the corporation submitting a

form prescribed by the chair of the workers' compensation board, giving

notice that the corporation elects to bring the executive officer of

such corporation named in the notice within the coverage of this

chapter.

d. Any two executive officers of a corporation who at all times during

the period involved between them own all of the issued and outstanding

stock of the corporation and hold all such offices, provided, however

that each officer must own at least one share of stock, who are the

executive officers of such corporation having other persons who are

employees required to be covered under this chapter shall be deemed to

be included in the compensation insurance contract or covered under a

certificate of self-insurance unless one or both the officers elect to

be excluded from the coverage of this chapter. Such election shall be

made by any such corporation filing a form prescribed by the chair of

the workers' compensation board with the insurance carrier or the chair

in the case of self-insurance giving notice that the corporation elects

to exclude one or both of the executive officers of such corporation

named in the notice from the coverage of this chapter. Such election

shall be effective with respect to all policies issued to such

corporation by such insurance carrier as long as it shall continuously

insure the corporation and shall be final and binding upon the executive

officers as named in the notice until revoked by the corporation. If

such election is revoked, it shall be in writing on a form prescribed by

the chair and shall be filed with the chair and the insurance carrier.

Such revocation shall not be effective until thirty days after such

filing.

e. Any two executive officers of a corporation who at all times during

the period involved between them own all of the issued and outstanding

stock of such corporation and hold all such offices, provided, however

that each officer must own at least one share of stock, who are the

executive officers of such corporation that has no other persons who are

employees required to be covered under this chapter shall be deemed to

be excluded from coverage under this chapter unless one or both officers

elect to be covered. Such coverage may be effected by obtaining an

insurance policy or, in the case of self-insurance, by the corporation

submitting a form prescribed by the chair of the workers' compensation

board, giving notice that the corporation elects to bring one or both

executive officers of such corporation named in the notice within

coverage of this chapter.

f. Notwithstanding the provisions of paragraph a of this subdivision

or any other provision of this chapter, any executive officer of a

religious, charitable or educational corporation and the officers of a

municipal corporation, and officers of any post or chapter of

organizations of veterans of any war of the United States may be brought

within the coverage of the insurance contract as if they were employees

by any such corporation filing with the insurance carrier, upon a form

prescribed by the chair of the workers' compensation board, a notice

that the corporation elects to bring one or more executive officers of

such corporation named in the notice within the coverage of this

chapter. Such election shall be effective with respect to all policies

issued to such corporation by such insurance carrier as long as it shall

continuously insure the corporation. If such election is revoked, it

shall be in writing on a form prescribed by the chair and filed with the

chair and with the insurance carrier and a copy thereof furnished to

each officer as to whom such revocation is applicable, upon a form

prescribed by the chair. Such revocation shall not be effective until

thirty days after such filing. The estimation of the wage values of

executive officers within the coverage of the insurance contract shall

be reasonable and separately stated and added to the valuation of the

payrolls upon which the premium is computed.

g. The executive officers brought within the coverage of the insurance

contract, and the dependents of any such executive officers, including

executive officers of religious, charitable or educational corporations

and officers of municipal corporations, and officers of any post or

chapter of organizations of veterans of any war of the United States

that have elected to bring their officers within the coverage of the

policy, shall have the same rights and remedies as any employee and

shall be entitled to compensation and medical care as provided by this

chapter, and the insurance carrier shall be liable therefor and for

payments into the special funds provided in this chapter as in the case

of an employee. The executive officers who may be brought within the

coverage of an insurance contract shall include an officer of a

corporation who at all times during the period involved between them

owns all of the issued and outstanding stock of the corporation and

holds all of the offices pursuant to paragraph (e) of section seven

hundred fifteen of the business corporation law or two executive

officers of a corporation who at all times during the period involved

between them own all of the issued and outstanding stock of such

corporation and hold all such offices and who is the executive officer

or who are the executive officers of a corporation that has no other

persons who are employees required to be covered under this chapter.

h. Any officer or officers, elective or appointive, of a municipal

corporation or other political subdivision of the state complying with

the provisions of group nineteen of subdivision one of section three of

this chapter shall be deemed executive officers subject to the

provisions of this subdivision.

6-a. Insurance contracts with fire or ambulance districts.

Notwithstanding any other provision of this section or of this chapter,

any insurance contract to secure workers' compensation for a fire or

ambulance district pursuant to subdivision one or subdivision two of

section fifty of this chapter issued to take effect on or after July

first, nineteen hundred sixty, in relation to a fire district and

January first, in the year next succeeding the year in which this

subdivision as hereby amended becomes effective, in relation to an

ambulance district or any such contract renewed to continue in effect on

or after such dates, shall provide workers' compensation coverage for

all fire or ambulance district officers, whether elective or appointive,

and all fire or ambulance district employees, whether or not they are

compensated for their services, unless the board of fire or ambulance

commissioners of the fire district or ambulance district by resolution

elects not to provide such coverage for any one or more of such officers

or employees, or class thereof. Such election not to provide such

coverage shall be effective with respect to all such insurance contracts

thereafter issued to such fire or ambulance district by any insurance

carrier until revoked in whole or in part by resolution of the board of

fire or ambulance commissioners of the fire or ambulance district. Such

election not to provide such coverage shall not become effective until

thirty days after a copy of such resolution has been filed with the

chairman of the workers' compensation board and with the insurance

carrier and a copy thereof is furnished to each officer and employee as

to whom such revocation is applicable. The chairman of the workers'

compensation board shall prescribe the form of such resolution. The

provisions of this subdivision shall not be applicable in cases where

the injury arises out of and in the course of duty as a volunteer

firefighter or a volunteer ambulance worker or as a civil defense

volunteer and where the computation of benefits would be made under the

provisions of the volunteer firefighters' benefit law or the volunteer

ambulance workers' benefit law or under article ten of this chapter.

7. Limitation of the issuance of policies by a foreign insurance

company. No policy or contract of insurance issued by a foreign stock

corporation or mutual association authorized to transact the business of

workers' compensation insurance in this state, except a corporation

organized under the laws of a state or country outside of the United

States and domiciled in this state, covering or intended to cover the

liability of an employer to his employees under this chapter, shall be

accepted as a compliance with subdivision two of section fifty of this

chapter, unless such foreign stock corporation or mutual association

shall have filed with the superintendent of financial services a bond or

undertaking with good and sufficient sureties to the people of the state

of New York, and conditioned upon the payment in full of any and all

compensation and benefits as provided in this chapter to any and all

persons entitled thereto under any such policy or contract of insurance.

Such bond shall be approved as to form by the attorney-general and as to

sufficiency by the superintendent of financial services. The amount of

such bond shall be such sum as may reasonably represent twenty-five per

centum of the outstanding reserves for compensation losses on policies

issued by such foreign stock corporation or mutual association upon

risks located in the state of New York as determined by law or by the

requirements of the superintendent of financial services, provided,

however, that the amount of such bond shall in no case be less than

twenty-five thousand dollars nor more than one million dollars. Such

bond shall be renewed annually. Every such bond shall contain a

provision authorizing the attorney-general upon the certificate of the

superintendent of financial services that there has been default in the

payment of compensation for thirty days or that the bonded company has

become insolvent to enforce such bond in the name of the people of the

state of New York for the benefit of any and all persons entitled to the

compensation assured by any policy issued by such foreign stock

corporation or mutual association or otherwise entitled to any benefits

under such policy. In lieu of the bond required to be given hereunder

any such foreign stock corporation or mutual association may deposit

with the superintendent of financial services securities of the kind

prescribed in section one thousand three hundred eighteen of the

insurance law in an amount equal to twenty-five per centum of the

outstanding reserves for compensation losses on policies issued by such

foreign stock corporation or mutual association upon risks located in

the state of New York, but not less than twenty-five thousand dollars

nor more than one million dollars. In computing the amount of such

securities they shall be valued as determined by the superintendent of

financial services in valuing the assets of insurance companies. Such

securities shall be held by the superintendent of financial services as

a special deposit and as express security for the payment of such

compensation or benefits and may be sold by the said superintendent

without notice in the event that there has been default in the payment

of compensation for thirty days or that the depositing company has

become insolvent. The income thereon shall be collected by the

superintendent of financial services and, prior to any default in the

payment of such compensation or benefits, shall be paid over by him to

the stock corporation or mutual association depositing the same.

However, no such bond or undertaking shall be required to be filed

after July first, nineteen hundred thirty-eight, by any carrier making

payment to the stock or mutual funds respectively established by

sections one hundred seven and one hundred nine-d of this chapter.

8. A self-employed person, a partner of a partnership as defined in

section ten of the partnership law but not including a limited partner,

a partner of a registered limited liability partnership as defined in

section two of the partnership law, a member of a limited liability

company as defined in subdivision (m) of section one hundred two of the

limited liability company law or a member of a professional service

limited liability company as defined in subdivision (f) of section one

thousand two hundred one of the limited liability company law, having

other persons who are employees required to be covered under this

chapter may be included in the compensation insurance contract or

covered under a certificate of self-insurance. Such election shall be

made by any such partnership, sole proprietorship, registered limited

liability partnership, limited liability company or professional service

limited liability company filing with the insurance carrier or the chair

in the case of self-insurance upon a form prescribed by the chair, a

notice that the partnership, sole proprietorship, registered limited

liability partnership, limited liability company or professional service

limited liability company elects to include the partner, partners, the

self-employed person or member named in the notice in the coverage of

this chapter. Such election shall be effective with respect to all

policies issued to such partnership, sole proprietorship, registered

limited liability partnership, limited liability company or professional

service limited liability company by such insurance carrier as long as

it shall continuously insure the employees of the partnership, sole

proprietorship, registered limited liability partnership, limited

liability company or professional service limited liability company.

Such election shall be final and binding upon the partner, self-employed

person or member named in the notice until revoked by the partnership,

sole proprietorship, registered limited liability partnership, limited

liability company or professional service limited liability company. A

self-employed person, a partner of a partnership, a partner of a

registered limited liability partnership, a member of a limited

liability company or a member of a professional service limited

liability company having no other persons who are employees required to

be covered under this chapter shall be deemed to be excluded from

coverage under this chapter unless he or she elects to be covered. Such

coverage may be effected by obtaining an insurance policy.

The self-employed persons, partners of a partnership, partners of a

registered limited liability partnership, members of a limited liability

company or members of a professional service limited liability company

brought within the coverage of the insurance contract, and the

dependents of any such self-employed persons, partners of a partnership,

partners of a registered limited liability partnership, members of a

limited liability company or members of a professional service limited

liability company shall have the same rights and remedies as any

employee or his or her dependents and shall be entitled to compensation

and medical care as provided by this chapter, and the insurance carrier

shall be liable therefor and for payments into the special funds

provided in this chapter as in the case of an employee.