Opinion ID: 2625620
Heading Depth: 1
Heading Rank: 6

Heading: Nevada's Workers' Compensation Act

Text: Prior to 1980, the Nevada Industrial Commission was the sole provider of workers' compensation insurance in Nevada. Legislative Counsel Bureau, Leg. Comm. on Workers' Compensation, Bulletin No. 01-19 at 5, 71st Leg. (Nev., 2001). But, in 1979, recognizing that some employers could fund compensation benefits by themselves, the Legislature allowed employers to opt out of the state industrial insurance system and remain personally liable for the claims of their injured employees. Id.; see generally NRS Chapter 616B. Thus, the Legislature permitted those qualified employers to self-insure. Id.; NRS 616B.300. As self-insurers, these employers are exempt from the statutory requirement that employers purchase workers' compensation insurance. See generally NRS 616B.300. However, in order to qualify as a self-insured employer, the employer must be certified by the Commissioner of Insurance, which requires the employer to prove that it is financially capable of assuming the responsibility to pay the claims of its injured workers. NRS 616A.305; see also NRS 616B.300(1). Additionally, the self-insured employer must obtain excess insurance in order to provide protection against a catastrophic loss. NRS 616B.300(5). The excess insurance policy protects the self-insured employer when the specific or total losses in a policy year exceed its deductible. 23 Eric Mills Holmes, Appleman on Insurance § 145.1 at 4 (2d ed., interim vol., 2003) (stating that excess coverage is a second layer of insurance coverage that is generally triggered on the exhaustion of the limits of the primary policy). The Workers' Compensation Act defines insurer as including self-insured employers. NRS 616A.270(1).