CHAPTER 23. Workers’ Compensation
Subchapter IV. Compulsory Insurance, Self-Insurance and Substitute Compensation Systems
(a) Every employer to whom this chapter applies shall insure the payment of compensation to the employees, or their dependents, in the manner provided in § 2372 of this title. While such insurance remains in force, the employer shall be liable to any employee, or the employee’s dependents, for personal injury or death by accident only to the extent and in the manner specified in this chapter.
(b) Every employer having a primary place of business in another state shall carry Delaware workers’ compensation coverage in full for any employees doing substantial work in the State as if they were an employer in Delaware. Every such employer whose employee is injured during the course of employment within the territory of the State shall notify such employee of that employee’s rights under this chapter.
(c) Substantial work shall include, but not be limited to:
(1) A construction or contracting business for which a Delaware employer would be required to be licensed under Chapter 25 of Title 30;
(2) A business of any sort in which 1 or more employees is primarily engaged in the business of the employer in the territory of the State of Delaware for more than 5 consecutive work days at a single time; or
(3) Working for a business of any sort in which 1 or more employees is primarily engaged in the business of the employer for more than an aggregate of 3 weeks in any 6-month period. For purposes of this section a week shall consist of 5 consecutive work days.
(d) The insurance required of the above-described employers shall consist of:
(1) An actual Delaware workers’ compensation policy covering the activities of the employer for any employee engaged in the employer’s business in the territory of the State; or
(2) A written rider on an out-of-state policy of insurance covering the work activities of the employees as fully and completely as an actual Delaware workers’ compensation policy would; or
(3) A declaration of self-insurance that would be valid and acceptable if made by a Delaware employer in the territory of the State providing such coverage, filings and surety as is required of Delaware employers to be self-insured for claims for Delaware workers’ compensation.
(e) All such employers described in this section shall comply with §§ 2372, 2373 and 2374 of this title.
(f) Every Delaware construction or contracting business employing an out-of-state business for which a Delaware employer would be required to be licensed under Chapter 25 of Title 30 shall verify in any business transaction that the out-of-state construction or contracting business is in compliance with this requirement.Code 1915, § 3193y; 29 Del. Laws, c. 233; Code 1935, § 6095; 19 Del. C. 1953, § 2371; 70 Del. Laws, c. 172, § 4; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 1, § 21;
(a) Every employer to whom this chapter applies shall insure and keep insured the employer’s liability for compensation in some corporation, association or organization approved by the Department and authorized to transact the business of workers’ compensation insurance in this State or shall furnish to the Department satisfactory proof of the employer’s financial ability to pay directly the compensation, in the amount and manner and when due, as provided in this chapter.
(b) In any case, the Department or Board may require the deposit of an acceptable security, indemnity or bond to secure the payment of compensation liabilities as they are incurred. All bonds of insurance carriers or self-insurers deposited to secure their obligations under this chapter shall be deposited with the State Insurance Commissioner.
(c) Every insurer licensed to issue workers’ compensation and employers’ liability insurance by the Insurance Department pursuant to Title 18, shall offer to write each such policy subject to a deductible applying only to medical reimbursement and death benefits. The insured employer shall be permitted to accept or reject such a deductible at the time the policy is issued or renewed. Any applicable deductible shall be subject to the following provisions:
(1) The deductible shall apply separately to each occurrence during the policy term regardless of the number of employees injured in the occurrence;
(2) The deductible shall be subject to a minimum of $500 and a maximum of $5,000, with intermediate deductible increments of $500;
(3) The premium charged for a deductible form of policy shall be subject to an actuarially sound credit related to the amount of the deductible;
(4) In the event of a claim under a deductible form of policy, the insurer shall administer the claim as though no deductible applied and shall then be entitled to reimbursement from the employer for the amount of said deductible.
(d) Every insurer licensed to issue workers’ compensation and employers’ liability insurance by the Insurance Department pursuant to Title 18 shall write a policy and base its rates upon the limited term of employment, rather than on an annual basis, for summer employees employed by various civic and nonprofit associations whose wages are funded through grants awarded by the Department of Community Affairs.Code 1915, § 3193z; 29 Del. Laws, c. 233; 30 Del. Laws, c. 203, § 8; 37 Del. Laws, c. 239, § 3; Code 1935, § 6096; 47 Del. Laws, c. 174; 48 Del. Laws, c. 24; 19 Del. C. 1953, § 2372; 63 Del. Laws, c. 250, § 4; 64 Del. Laws, c. 171, § 1; 70 Del. Laws, c. 172, §§ 3, 4; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 84, § 3; 74 Del. Laws, c. 390, § 1;
Whenever an employer who is a self-insurer under this chapter enters into an agreement to pay compensation to an injured employee or the employee’s dependents in case of the employee’s death or whenever an award is made by the Board in favor of such injured employee or the employee’s dependents in case of the employee’s death, the employer shall pay the full liability under the agreement or award to a savings bank or trust company in accordance with § 2359 of this title. Such fund, together with all interest arising from the investment thereof, shall be held and paid out in accordance with § 2359 of this title. Failure on the part of a self-insured employer to make such payment within 30 days after the making of an agreement or award shall forthwith terminate the right of such employer to carry the employer’s own insurance.Code 1915, § 3193z; 29 Del. Laws, c. 233; 30 Del. Laws, c. 203, § 8; 37 Del. Laws, c. 239, § 3; Code 1935, § 6096; 19 Del. C. 1953, § 2373; 70 Del. Laws, c. 172, § 4; 70 Del. Laws, c. 186, § 1;
(a) Every employer to whom this chapter applies shall file with the Department in form prescribed by it, annually or as often as may be required by the Department, evidence of the employer’s compliance with §§ 2372 and 2373 of this title and all other sections relating thereto.
(b) Every insurance carrier shall notify the Department of Labor, on forms specified by the Department, within l4 days that an employer’s policy for workers’ compensation coverage has been canceled, lapsed, or is otherwise terminated, other than for replacement of coverage through a different insurance carrier, with a copy to the employer.
(c) Every employer, upon such notice, or, at the latest, when contacted by the Department of Labor concerning such notice, shall provide proof of insurance within 14 days or establish by proof satisfactory to the Secretary of the Department of Labor that the employer has:
(1) Been granted self-insured status in accordance with all the laws of the State;
(2) Terminated operation;
(3) Terminated or retired any employees and the operators of the business have elected to waive coverage under § 2308 of this title;
(4) Sold the business, been voluntarily or involuntarily liquidated, and/or enjoined by the courts from doing business; or
(5) Otherwise ceased to exist as an entity that requires workers’ compensation coverage in Delaware.
(d) Whoever, being an employer, refuses or neglects to comply with the sections referred to in subsection (a) of this section shall be subject to a civil penalty:
(1) For employers previously insured until the default, an amount equal to the premium for the insurance not purchased times 3, based on the last premium rate charged by the carrier providing the coverage before the default for a 1-year period; or
(2) For employers without previous history of coverage, an amount equal to the most expensive policy premium actually charged by any insurance carrier doing business in the State at the time of the assessment for appropriate coverage of the uninsured employer’s business times 3 for a 1-year period.
(e) Whoever, being an employer, refuses or neglects to comply with the sections referred to in subsection (a) of this section on a continuing basis after notice by the Department of Labor shall be subject to a civil penalty:
(1) As described in subsection (d) of this section on the fifteenth day after notice to comply with subsection (c) of this section; and
(2) An assessment of $10 per day for each employee in the employer’s service at the time when the insurance became due, but not less than $250 for each day of such refusal or neglect and until the same ceases.
(3) The employer shall also be liable to the employer’s injured employees during continuance of such neglect or refusal, either for compensation under this chapter or in an action at law for damages. In such action, upon proof that the employer has not complied with this section, it shall not be a defense that the:
a. Employee was negligent; or
b. Employee had assumed the risk of the injury; or
c. Injury was caused by the negligence of a fellow employee.
(f) If any employer is in default under §§ 2372 and 2373 of this title for a period of 30 days, in addition to the above, the employer may be enjoined by the Court of Chancery of this State from carrying on business while such default continues. The Department of Labor shall file such petitions in such cases seeking an order of the court.
(g) When an employer is uninsured for any period and obtains insurance subsequently to comply with notice to provide proof of insurance, for each day that the employer is uninsured, regardless of whether or not a claim arises during that period, the employer shall be assessed the penalty in subsection (d) of this section unless the employer can demonstrate to the satisfaction of the Secretary of Labor that the uninsured status was the fault of some other business entity, in which case the assessment shall be levied upon the business entity at fault for the uninsured status. Before an alternative business entity may be charged with the assessment, it shall be given notice and if the liability is contested, a hearing before the Secretary of Labor.
(h) Any assessment or fine collected under this section will be deposited in the Workers’ Compensation Fund and disbursed to pay the claims of any employee affected by the employer’s failure to comply with the requirements of insurance imposed by this chapter.Code 1915, § 3193aa; 29 Del. Laws, c. 233; Code 1935, § 6097; 19 Del. C. 1953, § 2374; 70 Del. Laws, c. 95, § 3; 70 Del. Laws, c. 172, §§ 4, 9; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 84, § 3; 76 Del. Laws, c. 1, § 22;
Whenever an employer has complied with § 2372 of this title relating to self-insurance, the Department shall issue to such employer a certificate which shall remain in force for a period fixed by the Department. The Department may however, upon at least 60 days’ notice and a hearing to the employer, revoke the certificate upon presentation of satisfactory evidence for such revocation. After the expiration of 1 year from such revocation, the Department may grant a new certificate to the employer upon the employer’s petition.Code 1915, § 3193bb; 29 Del. Laws, c. 233; Code 1935, § 6098; 19 Del. C. 1953, § 2375; 70 Del. Laws, c. 172, § 4; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 84, § 3;
For the purpose of complying with § 2372 of this title, groups of employers may form mutual insurance associations under the laws of this State, subject to such reasonable conditions and restrictions as may be fixed by the Department. Membership in such mutual insurance associations, so approved, together with evidence of the payment of premium dues, shall be evidence of compliance with § 2372 of this title.Code 1915, § 3193cc; 29 Del. Laws, c. 233; Code 1935, § 6099; 19 Del. C. 1953, § 2376; 71 Del. Laws, c. 84, § 3;
(a) Subject to the approval of the Department, any employer may enter into or continue any agreement with employees to provide a system of compensation, benefit or insurance in lieu of the compensation and insurance provided by this chapter.
(b) No such substitute system shall be approved unless it confers benefits upon injured employees at least equivalent to the benefits provided by this chapter, nor, if it requires contribution from the employees, unless it confers benefits in addition to those provided under this chapter at least commensurate with such contributions.
(c) Such substitute system may be terminated by the Department on reasonable notice and hearing to the interested parties, if it is shown that the system is not fairly administered or if its operation discloses latent defects threatening its solvency or if for any substantial reason it fails to accomplish the purposes of this chapter. Upon such termination the Department shall determine upon the proper distribution of all remaining assets, if any, subject to the right of any party in interest to take an appeal to the Superior Court.Code 1915, § 3193d; 29 Del. Laws, c. 233; Code 1935, § 6100; 19 Del. C. 1953, § 2377; 70 Del. Laws, c. 172, § 4; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 84, § 3;
(a) All policies insuring the payment of compensation under this chapter shall contain a clause to the effect that as between the employee and the insured the notice to or knowledge of the occurrence of the injury or death on the part of the insured shall be deemed notice or knowledge, as the case may be, on the part of the insurer, that jurisdiction of the insured for the purposes of this chapter shall be jurisdiction of the insurer and that the insurer shall in all things be bound by and subject to the awards, judgments or decisions rendered against such insured.
(b) No policy of insurance against liability arising under this chapter shall be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled to them all benefits conferred by this chapter and all installments of the compensation that may be awarded or agreed upon and that the obligation shall not be affected by any default of the insured after the injury or by any default in the giving of any notice required by such policy or otherwise. Such agreement shall be construed to be a direct promise by the insurer to the person entitled to compensation enforceable in the person’s name.
(c) All policies insuring the payment of compensation under this chapter shall contain a clause to the effect that when an insurer intends not to renew a policy, notice of such nonrenewal shall be given to the named insured, in writing, not less than 60 days prior to the end of the policy period. For the purposes of this subsection, “renew” means the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer, or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term. Mailing of notice of intention not to renew to the named insured at the insured’s address last of record with the insurer shall be by certified mail.Code 1915, §§ 3193ff, 3193ee; 29 Del. Laws, c. 233; Code 1935, §§ 6101, 6102; 19 Del. C. 1953, § 2378; 66 Del. Laws, c. 308, § 1; 70 Del. Laws, c. 172, § 4; 70 Del. Laws, c. 186, § 1;
(a) Purpose. — (1) The safety of Delaware workers is of paramount importance to the General Assembly. This program has been developed by the Delaware Department of Insurance to ensure that safety is a priority for everyone in the workplace and to ensure that those who comply with this section are rewarded with a reduction in insurance premiums. To that end, the Industrial Accident Board will review this program annually to determine its effectiveness and to make recommendations which will improve safety in the workplace.
(2) The program is intended to enhance the health and safety of workers in the State of Delaware.
(3) The program is intended to provide lower insurance premiums for qualifying employers who currently pay $3,161 or more (or such other amount set by the Insurance Commissioner by regulation) of annual Delaware workers’ compensation premiums and other employers under subsection (i) of this section.
(4) The program establishes both testing and inspection procedures to determine an employer’s qualification for a premium credit.
(b) Administration and scope. — (1) This section shall be administered by the Insurance Commissioner, who shall adopt such regulations, in accordance with existing law, to implement and administer this section.
(2) All employers who comply with the criteria set forth in this section shall be eligible for participation in the workplace safety program.
(3) Only Delaware work sites will be eligible for this program and safety credit applies to only Delaware premiums in multistate policies.
(c) Eligibility and premium credit. — An employer is eligible for the safety program if its annual premium is $3,161 or more. This amount may be adjusted by the Insurance Commissioner by regulation. Workplace safety credit eligibility is based on the most current unit statistical card filing. The Delaware Compensation Rating Bureau, or another qualified entity designated by the Department of Insurance, shall test each employer by taking the most current unit statistical card payroll times current rates times current experience modification to determine the employer’s premium size.
(d) Notice of employer eligibility. — Employers meeting the premium requirement will be notified by the Delaware Department of Insurance 7 months in advance of their policy renewal date. This notification shall include instructions for qualifying for a safe workplace credit.
(e) Eligibility period. — The Department of Insurance shall notify the employer of eligibility, and inform the employer that the employer must elect at least 5 months in advance of the date of policy renewal to participate in the safety program. Failure to notify the Department of Insurance within this time period of an intent to renew participation may preclude the employer’s participation in the program for the next year. Election to participate shall commence by contacting the Delaware Department of Insurance.
(f) Inspections and cost. — (1) All inspections shall be made by a representative from an independent safety expert company under contract to the Department of Insurance. The Department of Insurance shall notify the inspector of the employer’s request. The inspector, in turn, will then contact the employer to set up the first of 2 inspections. A second unannounced inspection shall be made no later than the expiration date of the policy to which any workplace safety credit based on the inspection will apply to confirm the initial certifications of safety in the workplace. The Department of Insurance shall notify the Delaware Compensation Rating Bureau (or such other organization designated by the Insurance Commissioner) when an employer successfully completes each scheduled and/or nonscheduled inspection. Failure to pass a scheduled inspection shall result in a denial of an employer’s eligibility to participate in the workplace safety program. However, an employer, after failing an inspection can request another inspection, after successful completion of which will make the employer eligible for participation in the workplace safety program.
(2) Any application for the workplace safety credit shall include a statement by the applicant as to any workplace injuries that have occurred in the 3 years prior to the application and the outcome of those injuries, including the specific nature of the injuries, any findings or fines relating to workplace safety resulting from the injuries, and any safety measures taken by the employer as a result of the injuries. This information shall be explicitly considered in determining whether an employer should receive the workplace safety credit.
(3) Notwithstanding paragraph (f)(1) of this section, the Department of Insurance shall permit insurance carriers issuing workers compensation insurance in Delaware to submit their own workplace safety inspection procedures for review by the Department. If the Department certifies that an insurer’s workplace safety inspection procedures are at least as rigorous as those employed by the Department and its independent safety expert, the Department shall permit that insurer’s inspection to satisfy the inspection requirements of paragraph (f)(1) of this section. The Department may require insurers to have their safety inspection procedures recertified on a bi-annual basis to maintain status as an acceptable substitute for the inspection described in paragraph (f)(1) of this section.
(4) Beginning on September 1, 2013, each workplace safety inspection conducted pursuant to paragraph (f)(1) or (3) shall include a determination as to whether the employer has complied with its obligations under § 2322E(d) of this title to provide a list of possible modified-duty jobs assignments for injured workers. Failure to comply with the requirements of § 2322E(d) of this title shall disqualify an employer from receiving the workplace safety credit. The period of review shall extend back to July 1, 2013, and beginning on July 1, 2016, shall be limited to a period of 3 years prior to the date of application for the workplace safety credit.
(5) The cost of each inspection will be borne by the employer. The minimum charge for safety inspection is $150 per location. This amount can be adjusted by the Insurance Commissioner by regulation. Each work location must successfully pass both inspections before an employer is entitled to a premium credit under the program. Inspection fees for large and/or complex employers may be established by the Department of Insurance.
(g) Renewals and eligibility. — An employer must apply for the workplace safety program each year. For each year after the initial qualification, the inspection requirement shall consist of 1 unannounced inspection. The Department of Insurance shall maintain a list of inspection charges which shall be sent to interested parties upon request.
(h) Premium size ranges and corresponding credits. — Safety credits will be granted according to the following formula:
20% x 1.0000–C
where “C” is the credibility of the qualified employer in the uniform Experience Rating Plan for the policy period expiring immediately prior to the application of the safety credit. If the qualified employer was not experience-rated in the policy period expiring immediately prior to the application of the safety credit, “C” will be set at 0.050. Safety credit packages will be rounded to the nearest whole percent.
(i) Effect upon mutual rates and schedule rating credits. — (1) Workers’ compensation mutual rates shall be adjusted because of implementation of this program. A Delaware Workplace Safety Program Factor shall be included in loss costs and residual market rates. This factor may offset credits given to qualified employers, so that the workplace safety program will neither increase nor decrease premiums for eligible employers in the aggregate.
(2) Schedule rating plan credits given to policyholders for “competitive” reasons cannot be withdrawn. Schedule credits given for safety reasons may be reduced to offset the workplace safety program premium credit.
(3) A merit rating plan shall be implemented by the Department of Insurance which will provide incentives for employers paying less than $3,161 of annual Delaware workers’ compensation premiums to maintain safe workplaces.76 Del. Laws, c. 1, § 23; 79 Del. Laws, c. 55, § 5; 81 Del. Laws, c. 79, § 33;
(a) If any insurance corporation, mutual association or company, interinsurance exchange or self-insurer:
(1) Violates this chapter; or
(2) Neglects or refuses to comply with this chapter; or
(3) Wilfully makes any false or fraudulent statement of its business or condition or a false or fraudulent return,
it shall be fined not less than $100 nor more than $1,000 for each such offense. The fine shall be assessed by the Industrial Accident Board after the insurance corporation, mutual association or company, interinsurance exchange or self-insurer is given notice and a hearing on the violation. The fine shall be payable to the State Treasurer.
(b) Whoever in this State:
(1) Acts or assumes to act as an agent in any capacity whatsoever for any insurance corporation, mutual association or company or interinsurance exchange, which is not authorized to do business in this State, or, if such authority to do business in this State has been suspended, so acts or assumes to act while such suspension is in force; or
(2) Neglects or refuses to comply with any obligatory provisions of this section; or
(3) Wilfully makes any false or fraudulent statement of the business or condition of any such insurance carrier or false or fraudulent return,
shall be fined not less than $100 nor more than $1,000 or imprisoned for not more than 90 days, or both.Code 1915, § 3193fff; 30 Del. Laws, c. 204; Code 1935, § 6128; 19 Del. C. 1953, § 2386; 58 Del. Laws, c. 531, § 5;