Tag: Workers Comp

More than 40 years after the American Psychological Association first included post-traumatic stress disorder in its manual for health care practitioners, the medical condition is becoming a source of increasing concern in the workers compensation sector.

In earlier eras, and under different names, PTSD was most closely associated with the exposure of military personnel to violence during combat, such as soldiers suffering from “shellshock” during World War I. And often sufferers toiled with untreated symptoms for years.

Now, PTSD is recognized as a mental injury that is suffered by many more people — often first responders but also victims of violent attacks and others — and one that can be sustained in a wide variety of situations, including in the workplace.

As recognition of the condition has grown, treatment protocols have evolved to the extent that many medical professionals view PTSD as a condition that can be effectively treated. As we report here, talk therapy, medication and technological tools are all used to treat PTSD.

Relatively few people suffer from PTSD — about 6% of the U.S. population will suffer from the condition at some point during their lives — but the number of people in the workers comp system that are treated for PTSD has grown and is likely to grow further. That’s because an increasing number of states are introducing and sometimes passing legislation that would extend PTSD presumptions to a wider group of workers, beyond the usual categories such as cops and firefighters. For example, Connecticut last year extended its presumption law to all workers who witness harrowing events, and Washington added nurses to its category of workers.

But many of the proposed presumptions have not made it through the various legislatures. Notably, in California Gov. Gavin Newsom vetoed a bill that would have expanded the state’s PTSD presumption to various nurses and other medical staff. In his veto message, the governor noted the “proven difficulty of establishing a direct relationship between a disease or injury and the employee’s work.”

Therein lies the rub, when you have different systems that are tapped to treat a medical condition that is difficult to conclusively prove is tied to a discrete cause — should PTSD treatment be paid for through workers comp, employee medical benefits or another program?

In cases where states conclude they have sufficient evidence to link medical conditions to certain occupations, there’s no getting around the financial consequences for employers and workers comp insurers. 

Of course, most PTSD presumption bills pending in state houses are well intended, but lawmakers must consider all the implications of expansion provisions and base their decisions on scientific analysis before approving measures that will have far-reaching consequences for many employers. 

 

 

As outside insurance, risk management and coverage counsel for companies that run the gamut from small start-ups to Fortune 100 global conglomerates, we work with a lot of clients and brokerages on cyber insurance policy procurements, renewals and claims. Most of our clients have agreements with brokers that address the different services that will be provided for procuring insurance and to handle claims. In our experience, there are a few things that the best brokers do to help their clients navigate the cyber risk landscape. Here they are:

Understand — and anticipate — the costs of a data breach 

We all know the common refrain that it is not a matter of “if” your company will be breached but “when.” And when that occurs, the first question executives and board members ask is “How much is this going to cost us?” 

Fortunately, there are several sources that brokers can share with their clients to ensure they’re informed as to what these incidents cost so they can be better informed when deciding what cyber insurance limits to purchase. 

First, the best brokers share benchmarking information with their clients as to what other, similarly situated companies in that industry are purchasing for cyber insurance limits. 

Second, they point their clients to reliable secondary sources, such as the annual IBM “Cost of a Data Breach Report.” The 2023 report found that the average cost of a data breach reached an all-time high of $4.45 million globally. In the United States, it was $9.48 million. The average cost of a mega breach was far larger: $36 million for a breach involving 1 million to 10 million records and $332 million for a breach involving 50 million to 60 million records. 

Third, the best brokers help their clients consider what a business income or reputation loss may look like in the aftermath of a major cyber event. For manufacturing, retail and service provider companies, ransomware attacks or voluntary network shutdowns to neutralize the threat actor can be far more expensive than incident response and notification costs combined. Thus, the best brokers encourage their clients to consider retaining a forensic accountant to estimate the potential cost of a shutdown. These loss estimates will better inform a policyholder on limits they need to buy. 

Set up a smooth renewal process

While clients must lead the renewal process because they are in the best position to understand their business needs, exposures, risks and finances, and ultimately control what is purchased, brokers should help them understand the process and ensure they have all the information they need.

This begins by ensuring the client starts early and allowing sufficient time — often at least several months — for the renewal process to play out. Brokers should provide new forms and endorsements well in advance of any binding deadlines to allow time for clients to review and understand any changes; encourage all relevant personnel at the company to be involved in the renewal and application process, such as IT, legal, risk and finance teams; ensure the client understands the application questions and answers applications fully; and explain how inaccurate answers or omissions can impact coverage. Indeed, in many jurisdictions, a misrepresentation in the application, even if unintentional, has the potential to void coverage. 

The best brokers also help clients anticipate potential underwriter follow-up questions and ensure they are prepared for underwriting calls and bring all the right internal experts to the calls. 

Finally, they analyze the policy language of each specimen policy and work with the client and its in-house or outside counsel to seek additional endorsements, enhancements or manuscript language as appropriate. 

Cyber insurance is not a one-size-fits-all product, nor should it be. Policies should be tailored to each policyholder’s unique risk profile and each insurer’s risk appetite. And, all parties should work to avoid ambiguous policy language so that they have shared expectations about how the policy will respond in those critical first hours and days following a breach. The best brokers ensure their clients understand not only pricing differences between quotes, but also how differences in policy language, sublimits, retentions, coinsurance, waiting periods, vendor panels and endorsements will impact coverage and incident response. 

Ensure compatibility 

The best brokers make sure the policyholder’s incident response plan works harmoniously with the policy. Sophisticated policyholders have well-developed and well-practiced incident response plans, which typically call for the retention of specific vendors, such as cyber incident response legal counsel, crisis communications/public relations firms, and incident response IT vendors. Oftentimes, these are vendors that the client has a longstanding relationship with. Unfortunately, we have seen many situations where a new client’s cyber insurance policy did not conform with the company’s existing incident response plan so that the client may have hired unapproved vendors, for whom the insurer disputed coverage, after the cyberattack. 

Brokers should ask clients who their preferred vendors are and confirm they are on the proposed insurer’s panel or are otherwise pre-approved on the policy by endorsement. 

Avoid privilege issues 

The best brokers understand the legal ramifications of their role, including most notably as it concerns protecting clients from a privilege waiver. A policyholder and its insurer share a goal in minimizing potential liabilities, such as claims and regulatory actions, arising from a cyber incident, which gives rise to a “common interest” that, in most situations, protects the disclosure of privileged information between the two. 

In many cases, this “common interest” does not extend to brokers. Some courts have found the attorney-client privilege or the work product protection is waived by the inclusion of the broker or claims advocate in communications between an insured and its attorneys about legal analysis or strategy. 

Several court decisions discuss this issue because third-party claimants have sought communications between policyholders and brokers. 

Thus, the best brokers and claims advocates take care to protect their clients and avoid setting up a potential privilege waiver situation. They educate clients on how their inclusion on calls and written communications about legal strategy could impact privilege. 

Traditional coverage

Finally, when a breach occurs, the best brokers and claim advocates remember to consider traditional policies such as crime; kidnap, ransom and extortion; and property that may provide additional coverage. Losses resulting from fraudulent transfers, social engineering schemes and business email compromises, may solely be covered under standard or endorsed insuring agreements to a crime policy, rather than a cyber or technology errors and omissions policy.

These other sources of recovery become particularly important where the policyholder’s cyber insurance limits are insufficient to cover the fall-out of a major cyber event. The best brokers know that some K&R policies provide sublimited coverage for cyber extortions and ransomware attacks. They also know that policies such as property, pollution, commercial general liability and professional liability may have endorsements that provide sublimited coverage for certain cyber risks and associated costs. They will also look to D&O insurance to potentially cover follow-on litigation. 

In sum, the best brokers understand their clients’ unique business and risk profiles in order to help put them in the best position to purchase the best coverage to protect against the ever-evolving cyber threats. 

Andrea DeField is a partner and co-lead of the cyber insurance practice at Hunton Andrews Kurth LLP in Miami. She can be reached by email at adefield@HuntonAK.com. Kevin Small is counsel in the firm’s insurance coverage group in New York. He can be reached at ksmall@HuntonAK.com.

Lawmakers in Washington state have passed legislation that would enhance workers compensation survivor benefits in deaths involving drivers working for ride-sharing services.

The measure, House Bill 2382, passed the Senate in a majority vote on Wednesday and now heads to the desk of Gov. Jay Inslee for his consideration. It previously passed the House.

The legislation would provide death benefits to survivors of ride-sharing drivers who die behind the wheel, regardless of whether they are driving a fare or waiting to receive a trip at the time of death.

The bill would amend current law, which does not provide workers comp death benefits if the driver is logged into a ride-sharing app but isn’t driving a customer at the time of death.

State Rep. Liz Berry, a sponsor of the measure, had previously stated that the bill was sparked by five ride-share drivers who were killed on the job since 2020.   

 

 

A Pennsylvania appellate court ruled Wednesday that a waste-to-energy facility is entitled to a new trial in a case in which a jury awarded an injured worker $6.3 million.  

The Pennsylvania Superior Court, in D’Amico v. Covanta Holding Corp., reversed a trial court decision denying a motion for a new trial filed by Covanta. The case involves a December 2017 incident in which welder Justin D’Amico was injured when a catwalk fell from a forklift and landed on him, crushing his pelvis and hips.  

Mr. D’Amico was employed by Sirk Mechanical Services Inc., which held a multi-year contract with Covanta.

Covanta appealed the October 2022 jury verdict for Mr. D’Amico, arguing it wasn’t liable for injuries caused by its subcontractor. The trial judge denied Covanta’s motion for a new trial.

The Superior Court ruled that while evidence presented at trial was sufficient to prove that Covanta retained control over its subcontractor’s work, the trial court issued improper jury instructions that prejudiced Covanta.  

Covanta had challenged other aspects of the award, including a calculation of $10,200 per year for a lifetime supply of medical marijuana.

The Superior Court said ordering medical marijuana cost reimbursement doesn’t violate federal law and that reimbursement is proper under the Pennsylvania Workers’ Compensation Act.

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A Vermont appeals court Tuesday sided with a workers compensation claims administrator in an insurance bad faith lawsuit brought by a state trooper who was injured on the job in June 2021.

The Vermont Superior Court, in Andrew Leise v. Corvel Enterprise Comp. Inc., ruled that Corvel was correct to assert that there was no cause of action for bad faith against an insurer’s agent or third-party administrator.

Mr. Leise and Corvel, which handled the workers comp claim on behalf of the State of Vermont, reached a settlement in October 2022. Meanwhile, Mr. Leise filed a civil suit against the Vermont Human Rights Commission alleging civil rights violations. That case is still pending.

Mr. Leise said he still has not been paid his workers comp settlement because Corvel refused to agree to a settlement release that would preserve Mr. Leise’s ability to pursue the suit against the commission.

He alleged the bad faith conduct was “part of a scheme intended to leverage the nonpayment of his workers’ compensation settlement to economically intimidate him and force him to compromise the VHRC Suit,” according to the Vermont Superior Court ruling.

Corvel contended Vermont doesn’t recognize a cause of action for bad faith against an insurer’s third-party administrator and also that Mr. Leise failed to exhaust his administrative remedies under workers comp law.

Citing case law, the appeals court said an insured’s remedy in a bad faith claim would be to sue the insurer and not its third-party administrator.  

The Texas Department of Insurance adopted the National Council on Compensation Insurance’s advisory loss cost filing that proposes an average decrease of 11%, effective July 1.

According to a bulletin the department issued Friday, insurance companies must use either the NCCI loss costs or their own independent, insurer-specific classification relativities as bases for all workers compensation policies written with an effective date on or after July 1.

The department said insurance companies may not base their rates on the NCCI loss costs from July 1, 2023, or any prior year’s loss costs or relativities.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

 

The U.S. Occupational Safety and Health Administration said Tuesday it cited an Alabama brick manufacturer for exposing workers to a substance that could potentially cause irreversible respiratory diseases.

OSHA cited Selma-based Henry Brick Co. Inc. for 11 serious citations and proposed $124,212 in penalties after investigators found the company exposed employees to silica crystalline.

Workers who are overexposed to silica crystalline could contract “incurable, progressively disabling and sometimes fatal illnesses,” OSHA said in a statement.

Henry Brick exposed workers to airborne concentrations of respirable crystalline silica of up to six-and-a-half times permissible exposure levels and it failed to implement work practices to reduce employee exposure to the substance, OSHA said.

The company also required employees to wear respirators without first providing proper training and it neglected to fit test or provide medical evaluation for workers who wear respirators, according to OSHA.

Henry Brick has 15 business days to contest the citation and proposed penalty.  

 

Musculoskeletal conditions associated with aging and identified during examinations of injured workers are increasingly common, adding to the complexity of claims, experts say.

These so-called degenerative conditions seen in comp claims can “become complicated because typically you have no baseline,” said Max Koonce, Memphis, Tennessee-based chief claims officer for third-party administrator Sedgwick Claims Management Services Inc.

“You don’t know where the person was as far as the degeneration before the work injury. And so it becomes challenging… Did this work injury make it worse? Or are we seeing symptoms of what was there to begin with? There’s been no worsening of the condition?”

And, as two recent court rulings show, state laws, evidence and expert testimony are among the determining factors for what is considered part of a work injury and what is considered part of getting older — and it’s not easy to predict where courts will fall on the issue, according to experts.

In Rachel Tolliver v. Dolgencorp Inc., dba Dollar General Corp., filed in the Supreme Court of Appeals in West Virginia on Feb. 20, a Dollar General store manager injured her lower thoracic spine in March 2020 while lifting cartons of windshield wiper fluid and subsequently requested pain-relief injections that the court determined would have fallen under treatment unrelated to her injury.

One medical report, which the court used to deny further treatment, stated that her disc protrusions were chronic rather than acute “given the associated degenerative disc disease, loss of disc space height, and facet hypertrophy, which all indicate a chronic degenerative process.” In a concurring opinion, several judges noted that “(t)his Court has repeatedly held that symptoms are not diagnoses and cannot be held compensable.”

Pennsylvania Liquor Control Board v. Dominick Demace Jr., filed Monday in the Commonwealth Court of Pennsylvania, concerns a maintenance repairman who was injured in 2020 and whose employer attempted to terminate benefits, contending the worker was being treated by his family doctor prior to the work incident for “degenerative joint disease and arthritis in his extremities and spine” and had recovered from the work-related injury.

A workers compensation judge, in a ruling affirmed by the state appeals court, found that the “credible and persuasive” medical opinion of one doctor showed that the claimant “suffered lumbar radiculopathy from bulging discs caused by the work injury and that the Claimant has not fully recovered from the work injury as he continues to have radicular pain.”

Dr. Adam Seidner, Hartford, Connecticut-based chief medical officer at Hartford Financial Services Group Inc., said as many as 25% of workers compensation claims include some form of degenerative condition, creating challenges for insurers and employers.

After proving that an injury occurred during the scope of employment, the next test when it comes to degenerative conditions is whether this is “an aggravation versus an exacerbation of this preexisting condition,” Dr. Seidner said.

Aggravation is a permanent worsening by the injury of a preexisting issue, while exacerbation is considered temporary, he said.

Under the care of a doctor using guidelines, it may become clear what is considered a permanent issue that could become part of the workers comp claim, he said. 

Imaging alone is unclear, as many people by their 20s can experience degenerative conditions without pain, according to Dr. Stacy Ostler, Enlyte LLC’s clinical director based in Boise, Idaho.

Claims often end up in litigation over the distinction of exacerbation versus aggravation.

“A lot of it comes down to what your lawyer is able to show,” Dr. Ostler said. “Their attorney has to show that the aggravation was work-related and resulted in disability and that prevented them from doing the regular duty position.”

Mr. Koonce said medical evidence is key.

“The most critical aspect to that is going to be the medical testimony or the medical opinion as to (whether) the injury actually worsened the degenerative condition that the individual had to begin with,” he said. “And that’s where you get into a myriad of different laws within different states as to what they could consider to be worsening.”

Kentucky lawmakers filed legislation Monday that would enable employers to petition courts for protection orders in cases where their employees have been subject to workplace violence.

House Bill 739 would be applicable in cases where employees are threatened with, or are the target of, workplace violence, including incidents perpetrated by current or former romantic partners.

The bill says if an employer has specific knowledge that a worker is the target of workplace violence, it must inform the individual before seeking the protection order.

Employees who either participate in the protection order filing process or those who must attend hearings relating to an employer-sought protection order would be permitted to participate in the process without having to use paid or unpaid leave.

Courts would determine the period of time covered by a protection order, but not to exceed three years.

Under the bill, violating a protection order would be a class A misdemeanor.  

The measure was sent to the House Committee on Committees for consideration.