Years of Serving Maryland

Years of Serving Maryland

Celebrating

We have certainly come a long way since 1914, when we first opened our doors as the Maryland State Accident Fund. Since that time, Chesapeake Employers has grown into the largest writer of workers’ compensation insurance in Maryland.

As we celebrate our 100th anniversary on April 16, 2014, we look back over the last century with pride for all we’ve achieved over the years. At this important milestone in our company’s evolution, Chesapeake Employers has never been stronger.

In November 2013, less than two months after becoming a non-profit, non-stock, private insurance company on October 1, we were

awarded an A- (Excellent) financial rating by the A.M. Best Company. This is a tremendous accomplishment and reflects our efforts during the past decade to control operating costs and claims expenses while building our financial strength. Although our corporate structure has changed, our mission has not. We continue to provide timely benefits to injured workers and unwavering protection for approximately 21,000 employers. Like our founding father, the late Senator David J. Lewis, we have always been committed to serving Maryland’s working men and women – the backbone of our state’s economy. We are excited to celebrate our first 100 years in business, and look forward to serving Maryland for many more years to come!

Sincerely,

Tom Phelan, CPA President and CEO Chesapeake Employers’ Insurance Company

Celebrating 100 years of service ... and one man’s visionDavid J. Lewis, a self-taught lawyer from Cumberland and a staunch friend of the working man, served in the Maryland State Senate from 1902 to 1906. He sponsored the first workers’ compensation bill in Maryland that led to the creation, in 1914, of the State Accident Fund, the predecessor to Chesapeake Employers. Lewis worked in the coal mines from the ages of 9 to 23, so he knew firsthand the inherent dangers of this industry. The leg-islation he wrote – the Maryland Workmen’s Compensation Act – was initially designed to provide compensation for those injured in our mining and logging indus-tries but was soon expanded to include many other occupations. This legisation was revolution-ary in its time. Previously, injured workers had little recourse to reclaim lost wages except to sue their employers, which proved too costly for the average work-ing man, who typically earned less than $10 a week. The modern workers’ compensation system “eliminated fault as a cause of injury” and provided for “speedy relief of benefits for injured work-men” that was “acceptable to employers and employees” alike.

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The Maryland Workmen’s Compensation Act of 1914 is passed. The Maryland State Accident Fund is created under the State Industrial Accident Commission. The Fund insures 842 Maryland businesses in its first year. Among the important decisions of the Fund that year: “Drivers of horses and mules [are] covered.” From the beginning, Chesapeake operates as a guaranteed market insurer, providing coverage to all who apply. On December 13, 1917, the Town of Rising Sun, Maryland, takes out a policy with the Fund to cover its town workers. Today, this town is our longest active policyholder, insuring with us continuously for 96 years.

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1914

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After World War I, the country is focused on economic growth. In the 1920s, Baltimore, like many East Coast cities, is a major manufacturer of garments and textiles. Working conditions typical of the time include crowded shop floors, low wages and long hours for both children and adults. There begins a growing awareness of the importance of workplace safety. The Fund’s 1927 Annual Report states, “The merit rating system which was put into effect in 1926 is working out very satisfactorily and is offering an incentive to the policyholder to take greater interest in accident prevention....”

1920s

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The nation is in the middle of the Great Depression in the 1930s. Many employers go out of business as a result. Maryland’s population at the time is 1.8 million. The Fair Labor Standards Act is passed in 1938. This federal law requires overtime to be paid after 40 hours are worked in a work week. Claims the Fund pays in 1932 include 983 temporary total, 56 permanent partial, and 11 fatalities. A glimpse of the types of claims in Maryland in 1932 include 263 from coal mining operations, 124 from bakeries, 31 from hardware/furniture stores, six from pickle makers, and three from umbrella manufacturers.

1930s

From the beginning, municipal employees are covered under the Maryland Workmen’s Compensation Act. We still cover many municipal fire departments. As the U.S. enters World War II, Maryland does its part for the war effort by building Liberty Ships at Sparrows Point and bombers in Middle River. In 1941, the Fund separates from the Industrial Accident Commission (today the Workers’ Compensation Commission). The Fund proposes in its 1943 Annual Report the creation of its first safety department. “The prompt establishment of this Department would materially assist in the war effort by reducing hazards, decreasing accidents in many of our industrial plants now engaged in the production of war material....” The Fund insures 3,609 businesses in 1949; the average annual premium is $234.

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1940s

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In 1951, the Fund writes $1 million in annual premium. The Fund promotes the basic slogans to its policyholders: “Security, Service, Savings” and “Cooperation in Accident Prevention.” In 1952, construction is completed on the William Preston Lane, Jr. Memorial Bridge (Chesapeake Bay Bridge). The Fund’s 1955 Annual Report notes an increase in the experience “Credit Rating Maximum from 40% to 50% in order to suitably recognize those employers who, through their continuing exceptional safety record, largely contributed to [our] success.”

1950s

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Throughout the 1960s, momentum builds for the Civil Rights Movement. In 1960, the Fund includes the message “Safety Pays” on policyholder material. The Fund moves to the state office building at 301 W. Preston Street in Baltimore. The Baltimore Beltway is completed in 1963, and construction begins on the second span of the Bay Bridge. In 1964, the Fund celebrates its 50th anniversary. Then-Governor J. Millard Tawes pens a congratulatory note on this milestone: “Operating in an era of changing social and economic conditions, the State Accident Fund has steadfastly maintained a competitive position among all compensation insurance carriers.... On this Golden Anniversary of the Fund, it is my pleasure to extend [my] congratulations....”

1960s

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In 1970, Congress enacts the Occupational Safety and Health Act and creates a new branch of government, OSHA, to help protect the nation’s workers on the job. In 1972, the national workplace injury rate is 10.9 incidents per 100 workers. By 2012, the workplace injury rate continues to show a positive decline with 3.2 incidents per 100 workers. In 1976, the country celebrates its bicentennial. The Fund is placed under the Maryland Department of Personnel. In 1977, the Fund moves to 8722 Loch Raven Blvd. in Towson, Maryland.

1970s

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Baltimore’s famed Harborplace opens in 1980. The increasing use of the personal computer in the 1980s revolutionizes the American workplace. The Fund insures 9,400 policyholders in 1983. In 1987, the Fund becomes an independent state agency, and writes $100 million in annual premium. In 1989, the World Wide Web is created. Also in 1989, the State Employee Risk Management Administration (SERMA) is formed by way of a governor’s Executive Order to establish a safer work environment for all state employees. The Fund breaks ground for a new building in Towson, Maryland.

1980s

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In 1990, the Maryland State Accident Fund changes its name to the Injured Workers’ Insurance Fund (IWIF). Imaging technology, a customer service call center, and start-to-finish claims processes are instituted. In addition, IWIF establishes its first fraud investigation and subrogation departments. In 1996, IWIF enhances its partnership with Maryland’s independent insurance agents and brokers. Today, we market through the offices of approximately 1,400 independent agents. By the end of the decade, we take on responsibility for coordinating disability benefits for Baltimore’s retired Bethlehem Steel mill workers after the steel mill closes operations.

1990s

In 2001, IWIF launches its safety brand message “Safety Saves With IWIF.” Ninety percent of policyholders report no workplace injuries in 2011 by making safety a priority. On October 1, 2013, we become Chesapeake Employers’ Insurance, a private insurance company. On November 26, 2013, Chesapeake Employers receives an A- (Excellent) financial rating from the A.M. Best Company upon converting from an independent state agency to a private company. Today, we are the leading writer of workers’ compensation insurance in Maryland. On April 16, 2014, we celebrate 100 years in business.

2000s & today

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