Key Takeaways
- Washington has an EXCLUSIVE State Fund (L&I) for workers' compensation—no private insurance market for most employers
- The Department of Labor & Industries (L&I) administers the state workers' compensation system
- Large employers may self-insure with L&I approval
- Washington workers' comp covers workplace injuries regardless of fault
- Employers cannot purchase private workers' comp insurance in Washington (except self-insurance)
Washington Workers' Compensation Insurance
Washington has one of the most unique workers' compensation systems in the nation—an exclusive state fund with no private insurance market.
Exclusive State Fund System
Washington is one of only a few states with an exclusive state workers' compensation fund:
Key Characteristics
| Feature | Washington System |
|---|---|
| Fund Type | Exclusive state fund |
| Administrator | Department of Labor & Industries (L&I) |
| Private Insurance | Not available (except self-insurance) |
| Employer Options | State fund or self-insurance only |
How It Works
- All employers must obtain workers' comp through L&I
- No private carriers can sell workers' comp in Washington
- Exception: Self-insurance for qualified large employers
- L&I sets rates based on industry classification and experience
Exam Tip: Washington's exclusive state fund is a key exam topic. Remember: NO private workers' comp market exists in Washington (except self-insurance).
Department of Labor & Industries (L&I)
L&I is the state agency that administers workers' compensation:
L&I Responsibilities
- Collects premiums from employers and employees
- Pays workers' compensation benefits
- Manages claims and disputes
- Sets rates and classifications
- Approves self-insurance applications
- Enforces workplace safety
Unique Washington Feature: Employee Premium Share
Unlike most states, Washington workers also pay a portion of the premium:
| Premium Responsibility | Percentage |
|---|---|
| Employer pays | Majority share |
| Employee pays | Portion deducted from wages |
Coverage Requirements
Washington workers' compensation is mandatory for all employers:
Who Must Be Covered
| Worker Type | Coverage Required |
|---|---|
| Full-time employees | Yes |
| Part-time employees | Yes |
| Seasonal workers | Yes |
| Agricultural workers | Yes (some exemptions) |
| Domestic workers | Some exemptions |
Exceptions
Limited exceptions exist for:
- Sole proprietors (optional for themselves)
- Partners (optional for themselves)
- Corporate officers (may elect exemption)
- Some independent contractors
Self-Insurance Option
Large Washington employers may self-insure:
Self-Insurance Requirements
| Requirement | Details |
|---|---|
| Financial Strength | Must demonstrate ability to pay claims |
| L&I Approval | Must be approved by L&I |
| Security Deposit | Required to protect claims |
| Ongoing Reporting | Regular reports to L&I |
| Claims Administration | Employer handles claims |
Self-Insured Employers
- Large corporations and municipalities
- Must meet financial requirements
- Subject to L&I oversight
- Handle own claims administration
Benefits
Washington workers' comp provides comprehensive benefits:
Benefit Types
| Benefit | Description |
|---|---|
| Medical Care | All necessary treatment |
| Time-Loss Compensation | Wage replacement during disability |
| Permanent Partial Disability | For lasting impairments |
| Permanent Total Disability | For complete disability |
| Death Benefits | To surviving dependents |
| Vocational Rehabilitation | Job retraining services |
Key Benefit Features
- No waiting period for medical benefits
- Time-loss has short waiting period
- Benefits set by statute
- L&I adjusts benefits periodically
Penalties for Non-Compliance
Washington has strict penalties for employers without workers' compensation:
Penalties
| Penalty Type | Details |
|---|---|
| Civil Penalty | Fines for non-compliance |
| Criminal Charges | Possible for willful violations |
| Personal Liability | Employer liable for injury costs |
| Stop Work Order | L&I can shut down worksite |
| Back Premiums | Must pay premiums owed plus penalties |
Claims Process
How Washington workers' comp claims work:
Filing a Claim
- Worker reports injury to employer
- Employer completes L&I report
- Worker files claim with L&I
- L&I investigates and determines coverage
- Benefits paid through L&I
Dispute Resolution
- L&I makes initial determination
- Workers can appeal to Board of Industrial Insurance Appeals
- Further appeal to Superior Court
- Legal representation allowed
Producer's Role
What P&C Producers Should Know
Since there's no private workers' comp market in Washington:
- Cannot sell workers' comp policies (no private market)
- Should understand the system to advise clients
- May sell other coverages like employers liability (if available)
- Should refer clients to L&I for workers' comp questions
What type of workers' compensation system does Washington have?
Which agency administers workers' compensation in Washington?
Who pays workers' compensation premiums in Washington?