03/09/21
National Workers Compensation Defense Network (NWCDN)
Written By John Tomei When the actions of an insured give rise to the need for a carrier to cancel a workers compensation policy, it is vitally important for the carrier to be aware of how to effectively cancel the policy under North Carolina law. The North Carolina Supreme Court has long established the principle that failure to comply with statutory requirements for cancelling an insurance policy renders the cancellation ineffective. Pearson v. Nationwide Mutual Ins. Co., 325 N.C. 246, 382 S.E.2d 745 (1989). Compliance with statutory requirements may seem straightforward but there are a few common pitfalls that prevent effective cancellation and create liability.Cancellations of workers compensation insurance policies in North Carolina are governed by N.C.G.S. § 58-36-105, Certain Workers Compensation Insurance Policy Cancellations Prohibited (hereinafter the Statute). It is critical for an insurance