2020 Georgia Code
Title 34 - Labor and Industrial Relations
Chapter 9 - Workers' Compensation
Article 4 - Insurance of Compensation Liability Generally
§ 34-9-121. Duty of Employer to Insure in Licensed Company or Association or to Deposit Security, Indemnity, or Bond as Self-Insurer; Application to Out-of-State Employers; Membership in Mutual Insurance Company

1. Unless otherwise ordered or permitted by the board, every employer subject to the provisions of this chapter relative to the payment of compensation shall secure and maintain full insurance against such employer's liability for payment of compensation under this article, such insurance to be secured from some person, corporation, association, or organization licensed by law to transact the business of workers' compensation insurance in this state or from some mutual insurance association formed by a group of employers so licensed; or such employer shall provide the board with sufficient information for the board to make an adequate assessment of the employer's workers' compensation exposure and liabilities and shall further provide evidence satisfactory to the board of such employer's financial ability to pay the compensation directly in the amount and manner and when due, as provided for in this chapter. In the latter case, the board may, in its discretion, require the deposit of acceptable security, indemnity, or bond to secure the payment of compensation liabilities as they are incurred; provided, however, that it shall be satisfactory proof of the employer's financial ability to pay the compensation directly in the amount and manner when due, as provided for in this chapter, and the equivalent of acceptable security, indemnity, or bond to secure the payment of compensation liabilities as they are incurred, if the employer shall show the board that such employer is a member of a mutual insurance company duly licensed to do business in this state by the Commissioner of Insurance, as provided by the laws of this state, or of an association or group of employers so licensed and as such is exchanging contracts of insurance with the employers of this and other states through a medium specified and located in their agreements with each other, but this proviso shall in no way restrict or qualify the right of self-insurance as authorized in this Code section. Nothing in this Code section shall be construed to require an employer to place such employer's entire insurance in a single insurance carrier.
2. 1. Any employer from another state engaged in the construction industry within this state with a workers' compensation insurance policy issued under the laws of such other state so as to cover that employer's employees while in this state shall be in compliance with subsection (a) of this Code section if:
      1. Such other state recognizes the extraterritorial provisions of Code Section 34-9-242; and
      2. Such other state recognizes and gives effect within such state to workers' compensation policies issued to employers of this state.
   2. Nothing in this subsection shall be construed to void any insurance coverage.
3. The board shall have the authority to promulgate rules and regulations to set forth requirements for third-party administrators and servicing agents, including insurers acting as third-party administrators or servicing agents, with regard to their management or administration of workers' compensation claims. All Title 33 regulations shall remain in the Department of Insurance.
4. Wherever a self-insurer has been required to post bond, should it cease to be a corporation, obtain other coverage, or no longer desire to be a self-insurer, the board shall be allowed to return the bond in either instance, upon the filing of a certificate certifying to the existence of an insurance contract to take over outstanding liability resulting from any presently pending claim or any future unrepresented claims; and the board shall be relieved of any liability arising out of a case where the injuries were incurred, or liability therefor, prior to the returning of the bonds.

(Ga. L. 1920, p. 167, § 66; Code 1933, § 114-602; Ga. L. 1962, p. 528, § 1; Ga. L. 1963, p. 141, § 13; Ga. L. 1972, p. 929, § 4; Ga. L. 1989, p. 14, § 34; Ga. L. 1997, p. 1367, § 5; Ga. L. 2009, p. 118, § 3/HB 330; Ga. L. 2016, p. 287, § 2/HB 818; Ga. L. 2019, p. 337, § 1-98/SB 132.)

The 2016 amendment, effective July 1, 2016, in subsection (a), in the first sentence, inserted "person" near the middle and substituted "shall provide the board with sufficient information for the board to make an adequate assessment of the employer's workers' compensation exposure and liabilities and shall further provide evidence satisfactory to the board" for "shall furnish the board with satisfactory proof" near the end.

The 2019 amendment, effective July 1, 2019, substituted "Department of Insurance" for "Insurance Department" at the end of subsection (c).

- Pursuant to Code Section 28-9-5, in 1988, "Commissioner of Insurance" was substituted for "Insurance Commissioner" near the end of subsection (a).

Pursuant to Code Section 28-9-5, in 1997, "Insurance Department" was substituted for "Department of Insurance" at the end of subsection (b).

- For article, "The Regulation of Group Property and Liability Insurance," see 20 J. of Pub. L. 479 (1971). For article, "Why Captives, Lord, What Have They Ever Done?: The Georgia Captive Insurance Company Act," see 26 Ga. St. B. J. 119 (1990). For annual survey on workers' compensation, see 61 Mercer L. Rev. 399 (2009). For annual survey on decisions impacting workers' compensation, see 69 Mercer L. Rev. 357 (2017).

As a matter of law, this section becomes a part of the contract of insurance as if expressly incorporated therein. Employers Liab. Assurance Corp. v. Hunter, 184 Ga. 196, 190 S.E. 598 (1937); Walker v. Bituminous Cas. Corp., 74 Ga. App. 517, 40 S.E.2d 228 (1946).

- Even if an employee agreed to a deduction from the employee's paycheck to cover the cost of workers' compensation insurance, the agreement would be contrary to law and to public policy, and would, therefore, be unenforceable. Morgan S., Inc. v. Lee, 190 Ga. App. 410, 379 S.E.2d 219 (1989).

Employer may insure different operations of its business separately and these separate operations may be insured by different insurance companies. Hanover Ins. Co. v. Sharpe, 148 Ga. App. 195, 250 S.E.2d 815 (1978).

- Whether any premium has been paid based upon the wages paid the claimant while employed is a matter solely between the employer and the insurance carrier. To hold that a premium based upon the wages of the employee must have been paid before the employee shall be covered by such policy would abrogate the purpose of the insurance provisions of the workers' compensation law (see now O.C.G.A. § 34-9-1 et seq.). Employers Liab. Assurance Corp. v. Hunter, 184 Ga. 196, 190 S.E. 598 (1937).

- The penalties which may be assessed against an employer who fails to meet the requirements of the workers' compensation law (see now O.C.G.A. § 34-9-1 et seq.) are the assessment of damages and attorney fees and criminal prosecution as a misdemeanant. Fox v. Stanish, 150 Ga. App. 537, 258 S.E.2d 190 (1979), overruled on other grounds, Samuel v. Baitcher, 247 Ga. 71, 274 S.E.2d 327 (1981).

- When there was no suggestion that the statutory employer refused or wilfully neglected to maintain insurance, and nothing in the statute would render the statutory employer vicariously liable for the immediate employer's failure in this regard, the superior court erred in affirming that portion of the board's award against the statutory employer. Franks v. Avila, 200 Ga. App. 733, 409 S.E.2d 564 (1991).

Superior court did not err in affirming the assessment of a penalty and attorney fees by the Appellate Division of the Georgia Board of Workers' Compensation against the contractor because the contractor willfully failed to obtain insurance as the contractor was subject to the Workers' Compensation Act, O.C.G.A. § 34-9-1 et seq., which required the contractor to be insured, as some evidence supported the Board's factual finding that the contractor knew the contractor would need three workers in addition to the contractor to complete the job but told the county that the contractor was not required to obtain coverage under the Act. Wills v. Clay County, 339 Ga. App. 79, 793 S.E.2d 432 (2016).

Cited in McCormack v. Shadburn, 42 Ga. App. 352, 156 S.E. 277 (1930); Moody v. Tillman, 45 Ga. App. 84, 163 S.E. 521 (1932); City of Macon v. Benson, 175 Ga. 502, 166 S.E. 26 (1932); Hunter v. Employers Liab. Assurance Corp., 54 Ga. App. 197, 187 S.E. 209 (1936); Elliott Addressing Mach. Co. v. Howard, 59 Ga. App. 62, 200 S.E. 340 (1938); Seibels, Bruce & Co. v. National Sur. Corp., 63 Ga. App. 520, 11 S.E.2d 705 (1940); Overton-Green Drive-It-Yourself Sys. v. Cook, 65 Ga. App. 274, 16 S.E.2d 50 (1941); Utica Mut. Ins. Co. v. Winters, 77 Ga. App. 550, 48 S.E.2d 918 (1948); Hartford Ins. Group v. Voyles, 149 Ga. App. 517, 254 S.E.2d 867 (1979); Hester v. Saturday, 138 Bankr. 132 (Bankr. S.D. Ga. 1991).

OPINIONS OF THE ATTORNEY GENERAL

Corporation operating facilities for hospital authority may not self-insure.

- A private, nonprofit corporation that is leasing and operating health care facilities on behalf of a hospital authority may not self-insure its workers' compensation liability as an "entity" of the authority. 1993 Op. Att'y Gen. No. 93-10.

Workers' compensation insurance policies containing standard deductibles are prohibited in Georgia since they do not provide for the direct payment to covered employees of all benefits by an insurer. 1980 Op. Att'y Gen. No. 80-126.

- If a newspaper dealer fails to carry workers' compensation insurance and comes within the provisions of the workers' compensation law (see now O.C.G.A. § 34-9-1 et seq.), the dealer would probably be liable as a self-insurer. 1962 Op. Att'y Gen. p. 613.

RESEARCH REFERENCES

Am. Jur. 2d.

- 82 Am. Jur. 2d, Workers' Compensation, § 663.

- 99 C.J.S., Workers' Compensation, § 159.

- Indemnity from manufacturer or vendor for liability incurred under workmen's compensation law for injury to employee by defective machine furnished employer, 37 A.L.R. 853.

Cancellation or attempted cancellation of insurance under Workmen's Compensation Act, 107 A.L.R. 1514.

Policy of workmen's compensation insurance issued to individual as covering employees of partnership of which he is a member, 114 A.L.R. 724.