Wyoming Liability and Workers' Compensation Insurance

Commercial General Liability (CGL)

Overview of CGL Coverage

Purpose: Protect businesses from liability for bodily injury and property damage to third parties

Coverage Trigger: Occurrence-based (injury/damage during policy period)

Defense Provided: Insurer provides legal defense, even if claim is groundless

CGL Policy Structure

Coverage A: Bodily Injury and Property Damage Liability

• Third-party bodily injury claims
• Third-party property damage claims
• Legal defense costs (in addition to limits)
• Settlements and judgments

Coverage B: Personal and Advertising Injury Liability

• Libel, slander, defamation
• False arrest, detention, imprisonment
• Malicious prosecution
• Wrongful eviction
• Copyright, trademark, slogan infringement in advertising

Coverage C: Medical Payments

• No-fault medical expense payments to others
• Typically $5,000 - $10,000 per person
• Goodwill coverage to prevent lawsuits

Coverage A: Bodily Injury & Property Damage

Bodily Injury Liability Covers:

• Medical expenses
• Lost wages
• Pain and suffering
• Rehabilitation costs
• Death benefits

Property Damage Liability Covers:

• Damage to others' property
• Loss of use of damaged property
• Repair or replacement costs

Examples:

• Customer slips and falls in business premises
• Delivery driver causes auto accident (non-owned auto)
• Product defect causes injury
• Work performed damages customer property

Coverage B: Personal & Advertising Injury

What's Covered:

Exclusions:

• Intentional injury (must be unintentional)
• Criminal acts
• Contractual liability
• Professional services

CGL Limits of Insurance

Split Limits Structure:

Example Limits: 1M/2M

• $1 million per occurrence
• $2 million general aggregate

Exam Tip: The general aggregate is the policy-period maximum for most claims. Once exhausted, no more coverage until policy renews. Products-completed operations has a separate aggregate.

CGL Exclusions

Common Exclusions:

• Expected or intended injury
• Contractual liability (unless assumption of liability in contract)
• Liquor liability (for bars/taverns—need separate coverage)
• Workers' compensation (employees—need WC policy)
• Employer's liability (except under separate coverage)
• Pollution (need environmental liability coverage)
• Aircraft, auto, watercraft (need separate auto/aircraft policies)
• Professional services (need professional liability coverage)
• Damage to your own property
• Damage to your products or work

Exam Tip: CGL does NOT cover auto liability, workers' comp, or professional services. These require separate policies. Know what CGL excludes as well as what it covers.

Professional Liability Insurance

Errors & Omissions (E&O) Coverage

Purpose: Protect professionals from liability for negligent acts, errors, or omissions in providing professional services

Who Needs E&O:

• Insurance agents and brokers
• Real estate agents
• Accountants and CPAs
• Lawyers and attorneys
• Consultants
• Engineers and architects
• Medical professionals (usually called malpractice)

Professional Liability Coverage

What's Covered:

• Negligent acts, errors, or omissions
• Failure to provide professional services competently
• Misrepresentation or misleading statements
• Failure to follow professional standards
• Legal defense costs

Claims-Made Trigger: Coverage applies if:

• Claim is made during policy period
• AND wrongful act occurred after retroactive date

Retroactive Date: Earliest date for which coverage applies (e.g., "Claims made on or after January 1, 2024")

Claims-Made vs. Occurrence

Tail Coverage (Extended Reporting Period):

• Extends time to report claims after policy ends
• Needed when switching E&O carriers or retiring
• Can be expensive (1.5x to 3x annual premium)
• Covers claims for past acts reported in extended period

Exam Tip: Professional liability is typically claims-made, not occurrence. This means the claim must be made during the policy period (or extended reporting period) for coverage to apply.

Wyoming Workers' Compensation

Overview of Workers' Compensation

Purpose: Provide benefits to employees injured on the job, regardless of fault

Exclusive Remedy: Workers' comp is employee's sole remedy against employer (prevents lawsuits except for intentional acts)

No-Fault System: Benefits paid regardless of who caused injury

State System: Wyoming has state workers' compensation system

Who Must Have Workers' Compensation

Wyoming Requirement:

• ALL employers with employees must carry workers' comp coverage
• No minimum number of employees required
• Coverage mandatory from the first employee

Exemptions:

• Sole proprietors (may elect coverage)
• Partners in partnerships (may elect coverage)
• LLC members (may elect coverage)
• Casual employees (limited, sporadic work)
• Real estate agents (independent contractors)
• Certain agricultural workers

Workers' Compensation Benefits

Medical Benefits

What's Covered:

• Doctor visits and hospitalization
• Surgery and medication
• Physical therapy and rehabilitation
• Medical equipment and prosthetics
• Travel expenses for medical care

No Limits: Medical benefits paid for life if necessary

No Deductibles: Employee pays nothing

Provider Choice: Initially employer's choice, then employee may change

Disability Benefits

Temporary Total Disability (TTD):

• Unable to work at all
• Pays 2/3 of average weekly wage
• Subject to state maximum (changes annually)
• Begins after waiting period (typically 3 days)
• Continues until recovery or maximum medical improvement

Permanent Partial Disability (PPD):

• Permanent impairment but can still work
• Benefits based on impairment rating
• Scheduled benefits for specific losses (e.g., hand, eye)
• Either scheduled or unscheduled benefits

Permanent Total Disability (PTD):

• Permanently unable to work
• Lifetime benefits
• 2/3 of average weekly wage
• Subject to maximum

Exam Tip: Workers' comp pays medical benefits for life but disability benefits are limited to 2/3 of average weekly wage up to state maximum. All Wyoming employers must carry coverage from first employee.

Death Benefits

If Employee Dies from Work Injury:

• Burial expenses (up to statutory limit)
• Ongoing payments to dependents
• Spouse receives benefits
• Dependent children receive benefits

Benefit Amount: Based on employee's average weekly wage

Duration: Until spouse remarries or children reach age 18 (or 25 if in school)

Wyoming Workers' Compensation System

State Fund: Wyoming has state-operated workers' comp fund

Private Insurance: Employers may purchase from private insurers

Self-Insurance: Large employers may self-insure with state approval

Employer Responsibilities

Provide Coverage:

• Purchase policy from state fund or private insurer
• Or obtain self-insurance approval
• Maintain continuous coverage

Post Notice:

• Display workers' comp poster
• Inform employees of coverage
• Provide insurer information

Report Injuries:

• Report injuries to insurer promptly
• File required injury reports with state
• Cooperate with investigations

Do Not Retaliate:

• Cannot fire employee for filing claim
• Cannot discriminate for exercising WC rights

Penalties for No Coverage

If Employer Fails to Carry Workers' Comp:

• Subject to fines and penalties
• Loses exclusive remedy protection
• Employees may sue for full damages
• May face stop-work orders
• Criminal penalties possible

Umbrella Liability Insurance

Purpose of Umbrella Coverage

What It Does:

• Provides additional liability coverage above underlying policies
• Broader coverage than underlying policies
• Fills coverage gaps

Typical Limit: $1 million to $5 million

Cost: Relatively inexpensive ($150-300 per million)

How Umbrella Coverage Works

Underlying Requirements: Must maintain primary policies:

• Auto liability: Typically 250/500/100 minimum
• Homeowners liability: Typically $300,000 minimum
• Business liability (if applicable)

Coverage Layers:

1. Primary Policy pays first up to limits
2. Umbrella pays excess over primary

Example:

• Auto accident: $1 million liability
• Auto policy: 250/500 ($500,000 max)
• Auto policy pays: $500,000
• Umbrella pays: $500,000

Umbrella Coverage Features

Broader Coverage:

• May cover some claims excluded by primary
• Provides worldwide coverage
• Covers legal defense costs

Retained Limit (Self-Insured Retention):

• Applies when umbrella provides primary coverage
• Similar to deductible
• Typically $250 to $10,000

Drop-Down Coverage: Umbrella may cover when primary policy exhausted by multiple claims

Exam Tip: Umbrella policies require maintaining minimum underlying liability limits. If underlying limits are less than required, the umbrella will pay as if those limits existed, creating a coverage gap.

Wyoming-Specific Considerations

Industries Common in Wyoming

Workers' Compensation Costs

Factors Affecting WC Premiums:

• Industry classification code
• Company payroll
• Claims history (experience modification)
• Safety programs
• Loss control measures

High-Risk Industries in Wyoming:

• Oil and gas extraction
• Mining and drilling
• Construction and roofing
• Tree trimming and forestry
• Trucking and transportation

Summary: Liability & Workers' Comp

Commercial General Liability: ✓ Covers third-party bodily injury and property damage ✓ Personal and advertising injury coverage ✓ Occurrence-based coverage ✓ Does NOT cover employees, auto, or professional services

Professional Liability: ✓ Errors and omissions coverage ✓ Claims-made trigger ✓ Tail coverage important when switching carriers ✓ Required for insurance producers, accountants, professionals

Wyoming Workers' Compensation: ✓ Required for ALL Wyoming employers (from first employee) ✓ No-fault system covering on-the-job injuries ✓ Medical benefits unlimited ✓ Disability benefits: 2/3 wage up to maximum ✓ Exclusive remedy (prevents lawsuits)

Umbrella Liability: ✓ Excess coverage over primary policies ✓ Requires minimum underlying limits ✓ Broader coverage than primary ✓ Relatively inexpensive for high limits