Do Your Comp Carrier's Interests Align with Yours?
Monday, we wrote a piece about a man who had experienced a stroke on the job which was misdiagnosed by a company nurse. He applied for workers' compensation benefits, but they were denied. Instead of appealing, he sued his employer based on the damages from the company nurse's misdiagnosis of his condition.
The point of the article was that the company may have been better off not contesting his workers' comp benefits, as the tort liabilities may be much greater.
After it was published, a friend emailed me to suggest that the company might have had no say in the initial contestation of the claim for benefits. He rightly suggested that an insurance company may have been the one to deny the claim and ultimately be victorious at the Industrial Commission hearing. I had considered that scenario but made an assumption (perhaps broad and potentially uninformed) that if the company was large enough to provide medical services onsite, it would likely be a high deductible or self-insured employer.
But what if it was, in fact, a first dollar insured? Did the actions of the insurance company align with the needs of the employer?
Perhaps not, but it does not always need to do so. An insurance company – specifically a workers' compensation insurer – agrees to cover the risk of work-related injuries and illnesses within the scope of the laws that govern the state. If a worker's specific situation does not meet the threshold for compensability, then a carrier should not be expected to assume the risk. And this could mean trouble for the employer; or other insurance companies that have provided policies for different lines of risk.
The problem with this scenario, however, is that some employers do not understand the potential hazards involved, and quite often support efforts of their carrier to deny otherwise legitimate claims. Whether they think the employee is “faking it,” or resent the fact that unsafe or careless behaviors led to an accident, they will work with and feed data to their carrier that supports the effort to deny specific claims. They do so without any thought whatsoever that successfully thwarting medical and indemnity benefits may not relieve them of potential liability for an injury or illness that occurred at the workplace.
As our Monday story bears out, quite the opposite may be true.
Employers would be best to recognize that workers' compensation can provide significant protections in the event of workplace incidents, and that their best course of action would be to support those legitimately injured workers in their charge. The interests of their workers' comp carrier are aligned so long as the insurance company is honoring its commitment to serve and care for those injured on the job, and they are not expected to absorb costs for conditions created outside the parameters of the insurance policy. If the carrier is not honoring its portion of the deal, and actively works to deny benefits to your workers who deserve them, you should speak up. You need to make noise.
In fact, you should get a different insurance company. They are putting you (and other insurers) at an unnecessary risk.
The fact is that your interests may not always be in line with those of your workers' comp insurance company. They don't have to be in constant lockstep. They do, however, have to meet their legal and financial obligations to both you and your injured workers. A failure to do so puts your interests in jeopardy. As we wrote Monday, you should not fight the wearing of a skirt that you intend to hide behind. The same notion still applies, but in this scenario, you should not easily let someone else take that skirt away.
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Robert Wilson is President & CEO of WorkersCompensation.com, and "From Bob's Cluttered Desk" comes his (often incoherent) thoughts, ramblings, observations and rants - often on workers' comp or employment issues, but occasionally not.
Bob has a couple unique personality characteristics. He firmly believes that everyone has the right to his (Bob's) opinion, and while he may not always be right, he is never in doubt. Enter at your own risk, and like all of our blog areas, we encourage you to read the disclaimer at the bottom of the page.
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Bob is an accomplished speaker for the workers' compensation industry. He is available for conferences, corporate events, children's birthday parties and Bar Mitzvahs. You may access his Speakers Brief here.