View From the Bench

Workers’ Comp Docket

Significant workers' compensation legal decisions from around the country.
By: | March 2, 2017 • 9 min read

Exposure to Pigeon Droppings Results in Compensable Claim

Lankford v. Newton County, et al., No. SD34269 (Mo. Ct. App. 01/17/17)

Ruling: The Missouri Court of Appeals held that an investigator suffered a compensable occupational disease.

What it means: In Missouri, a worker does not have to establish an “unequal exposure” for an occupational disease claim. The worker must show that the disease he suffered is not an “ordinary disease of life to which the general public is exposed outside of the employment.”

Summary: An investigator for the prosecutor’s office smoked in the employer’s basement. He began going to the roof of the building to smoke at the suggestion of an assistant prosecutor. He said that he preferred the roof because it was quiet, and he could think about the case he was working on. While on the roof, coworkers sought him out to talk about work-related matters.

The roof was a popular place for pigeons, and pigeon droppings accumulated there. The investigator was diagnosed with chronic obstructive pulmonary disease. He was also diagnosed with diseases relating to the exposure to pigeon droppings.

He underwent surgery and had a stroke, which left him unable to work. The investigator filed a workers’ compensation claim, asserting that his exposure to pigeon droppings caused an injury to his lungs and respiratory system. Subsequently, the investigator died due to complications of pneumonia and COPD. The Missouri Court of Appeals held that the investigator’s occupational disease was compensable.

The employer argued that the investigator’s duties did not require his presence on the employer’s roof, and the employer did not receive a benefit from the investigator retreating from his job to the roof to be alone and smoke 10 times per day.

The court found that the investigator’s exposure to pigeons and pigeon droppings arose out of and in the course of his employment. Experts agreed that the investigator underwent lung surgery to treat the infection caused by the bird droppings. The court found that the evidence establishes that the investigator’s work activities caused the exposure to the infection.

Award of Benefits Does Not Confer Immunity to Coworker

Entila, et al. v. Cook, et al., No. 92581-0 (Wash. 01/12/17)

Ruling: The Washington Supreme Court held that a coworker was not immune from a third-party suit because he was not acting in the course and scope of his employment when the accident occurred.

What it means: In Washington, the fact that a worker received workers’ compensation benefits plays no role in determining a coworker’s immunity in a third-party suit.

Summary: A worker for Boeing finished work for the day and was walking across the employer’s access road when he was struck by a coworker who was driving his vehicle out of the employee parking lot. The worker received workers’ compensation benefits for his injuries and sued the coworker.

The coworker argued that he was immune from suit because he was acting in the course of his employment and Boeing’s employer immunity shielded him from liability. The Washington Supreme Court held that the coworker was not immune from suit.

The court explained that if an injured worker qualified for benefits, the employer cannot be sued. However, the worker’s receipt of benefits does not control third-party immunity. The court explained that a third-party coworker is not eligible for immunity unless he is in the “same employ” as the injured worker. “Same employ” can be shown when the coworker is acting in the course of employment.

The court sent the case back to the trial court.

Passing Mention of Soreness Does Not Constitute Notice of Work Injury

Ross v. American Ordnance, et al., No. 16-0787 (Iowa Ct. App. 01/11/17, unpublished)

Ruling: In an unpublished decision, the Iowa Court of Appeals held that a worker’s claim was barred because she failed to provide sufficient notice of her injury to her employer.

What it means: In Iowa, a worker must give her employer notice of an injury within 90 days unless the employer has actual knowledge of the injury.

Summary: A worker for American Ordnance claimed that she told her supervisor that she hurt her shoulder when a box fell over. The supervisor said that the worker said her shoulder hurt a little bit. The supervisor asked if she wanted to call an ambulance or see a doctor, but she declined.

The worker continued to have problems with her shoulder. She was eventually diagnosed with a torn rotator cuff that required surgery. More than 90 days after the alleged injury, the worker filed a workers’ compensation claim. The Iowa Court of Appeals held that her claim was barred because she failed to provide American sufficient notice of her claim.

The court found that the worker had to do more than tell the supervisor that her shoulder was sore. She did not tell him there was a reasonable possibility that her condition was related to her work. The court found that American did not have actual knowledge of a reasonable possibility that her injury was related to her work.

The worker argued that the discovery rule applied to her claim. Under the discovery rule, the 90-day notice period would not begin to run until the worker recognized the nature, seriousness, and probable compensable nature of the condition.

The court rejected the argument, finding that the worker recognized the nature, seriousness, and probable compensable character of her injury on the date it occurred, so she informed her supervisor at the time of her injury.

A dissenting judge found that the worker provided sufficient notice to the employer when she said that a box fell and that she hurt her shoulder. The judge pointed out that the supervisor responded by offering to call for an ambulance.

Worker Wins Benefits for Blackout Accident Caused by Non-Work Factors

Nuclear Diagnostic Products, 116 NYWCLR 211 (N.Y. W.C.B., Panel 2016)

Ruling: The New York Workers’ Compensation Board held that a driver, who crashed his work vehicle after losing consciousness while driving, sustained a compensable accident under the WCL.

What it means: In New York, where a worker loses consciousness while driving the employer’s vehicle in the course of his employment, he is entitled to a presumption that his accident arose out of his employment.

Summary: The board held that a driver who crashed his work vehicle after losing consciousness while driving sustained a compensable accident. The driver reported to hospital staff that he started coughing, lost control of the car, and then remembered someone waking him up after the accident.

He also reported that he had been coughing due to an asthmatic reaction to a new air freshener in his house. The board explained that because the driver’s accident occurred in the course of his employment he was entitled to a presumption that the accident arose out of his employment.

Although a review of the medical records indicated that the driver lost consciousness due to a coughing attack caused by his asthma condition, the driving of the employer’s vehicle was an added risk of employment. This added risk caused the injuries to his neck and back. Therefore, the driver’s claim was compensable.

Worker Denied Benefits for PTSD After Death of Infant Client

Griffin v. Luzerne County Children and Youth, 31 PAWCLR 233 (Pa. W.C.A.B. 2016)

Ruling: The Pennsylvania Workers’ Compensation Appeals Board affirmed the workers’ compensation judge’s decision denying benefits to a caseworker who alleged she sustained post-traumatic stress disorder and depression after the traumatic death of a young baby she was supervising.

What it means: In Pennsylvania, the traumatic death of a baby that a caseworker is supervising is not sufficiently extraordinary or unusual within the context of the caseworker’s specific employment to rise to the level of an abnormal working condition.

Summary: The board affirmed the WCJ’s decision denying benefits to a caseworker who alleged that she sustained post-traumatic stress disorder and depression after the traumatic death of a young baby she was supervising.

Evidence indicated the caseworker had been at the baby’s home and held the baby. After she left, the parents began drinking, and ultimately, the mom closed the baby in the recliner and left him there all night.

On appeal, the caseworker argued the WCJ erred in finding that she failed to establish abnormal working conditions. Rejecting this argument, the board explained that the events in this case, while indisputably tragic, were not found to be sufficiently extraordinary or unusual, within the context of the caseworker’s specific employment, to rise to the level of an abnormal working condition. The caseworker had to deal with abused and neglected children, and her agency was charged with reviewing these types of scenarios.

Relying on a prior case holding that the more fact intensive the inquiry, the more deference a reviewing court should give to the WCJ’s findings, the board found no sound basis for disturbing the WCJ’s decision.

Evidence Establishes That Mosquito Bite at Work Led to Compensable West Nile

Allen v. Graphic Packaging International, Inc., No. 51,080-WCA (La. Ct. App. 01/11/17)

Ruling: The Louisiana Court of Appeal held that an operator established a work-related accident when he was bitten by a mosquito and contracted West Nile encephalitis. The operator was entitled to temporary total disability benefits.

What it means: In Louisiana, work-related insect bites or stings can be a compensable accident under the workers’ compensation law.

Summary: An assistant operator for Graphic Packaging International was sitting in the break room of the plant when he was bitten by a mosquito. Days later, he had fatigue and fever-related symptoms. He was eventually diagnosed with West Nile encephalitis. He filed a workers’ compensation claim. The Louisiana Court of Appeal held that he established a work-related accident.

The court found that the operator showed it was more probable than not that he was bitten on the job by a mosquito carrier of West Nile. The widespread outbreak of West Nile throughout the area and the summer conditions supporting the mosquito population demonstrated that the operator was exposed to other mosquitoes in the days before and after the accident. Also, the evidence and common sense established that the operator was exposed to mosquitoes away from work.

However, the operator’s time in the plant during the week before he experienced symptoms allowed for a conclusion that he was probably bitten during his 56 hours at work. Large doors to the plant were open allowing for exposure of mosquitoes to workers.

Also, the operator worked early in the morning and later in the afternoon, which were times that mosquitoes were the most active as confirmed by experts. The operator also pointed out that a coworker also contracted West Nile at work.

The court found that the operator was not entitled to permanent and total disability benefits before a proper evaluation of rehabilitation possibilities. The court found that he was temporarily totally disabled.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Insurance Executive

A Leader for Turbulent Times

Lloyd’s CEO Inga Beale is tasked with guiding the venerable insurance market through Brexit and the demands of the fiercely competitive global specialty business.
By: | July 6, 2017 • 12 min read

Underwriters at Lloyd’s are accustomed to taking on complex, even daunting, risks. The company’s leader looks at the world today and sees plenty of opportunity, but also much to be concerned about.

“Political instability is something that troubles me more than anything else because I think there is now more uncertainty across the world than there has ever been,” said Inga Beale, CEO of Lloyd’s of London.

“It feels that all of the norms that I grew up with are being challenged — openness, globalization, acceptance, inclusion — on a global scale.”

Advertisement




Appropriately, we’re sitting around a table in Beale’s modern glass-fronted office at the top of the Lloyd’s Building — itself a vision from the future — to talk about Brexit and Lloyd’s newly announced Brussels subsidiary.

Add to the mix Donald Trump and the threat of nuclear attack from North Korea, the bombing of Syria and a spate of terrorist attacks across Europe, and it’s clear we are living in the most dangerous period certainly since the Cold War, or possibly ever, believes Beale.

That belief received even more chilling reinforcement when terrorists detonated a bomb at an Ariana Grande performance in Manchester, England on May 22.  Twenty two people, some of them children, were killed and more than 50 wounded in that attack.

Three years ago, it was Beale herself making world headlines with her appointment as the first female CEO in Lloyd’s 329-year history. But now Brexit and other seismic disruptions to world order have taken center stage.

Lloyd’s announced at the end of March that it would establish a new European subsidiary in Brussels in time for January 1, 2019 renewals so it can continue writing risks for all 27 European Union (EU) and three European Economic Area states after the UK exits the EU.

Currently, it uses its passporting rights to serve EU customers from London, but the expected loss of those rights after Brexit necessitated the establishment of a new subsidiary.

For now though, it’s business as usual, said Beale, with the UK remaining a full EU member for at least two more years. She added, with a reassuring smile, that there will be no immediate impact on existing policies, renewals or new policies written during that time.

“We were campaigning very much to remain in the EU before the referendum because we knew what the likely impact [of leaving the EU] would be on Lloyd’s,” said Beale, whose impressive resume includes stints with GE Insurance Solutions, Zurich and Canopius.

“We rely very much on our licensing network, and being part of the EU means that from London we can write insurance and reinsurance for all of the EU countries with our passporting authority.

“But with the UK exiting the EU, it now means that we lose those licensing powers to offer insurance with immediate effect. To counteract this, we have determined to set up a subsidiary within the EU, meaning that about five percent of our global revenues will have to go through this subsidiary because it is insurance business offered to our EU-based clients.”

Beale and her team also negotiated that most of Lloyd’s underwriting business will remain in London, as will the majority of the transactions and decision-making powers. Meanwhile, the manpower needed to run the new Brussels operation will be in the “tens rather than hundreds,” she is quick to point out.

“It’s not a huge raft of people having to move over,” she said.

“Lloyd’s will continue to do 95 percent of its business as it has always done — it’s only the other five percent that will have to go through a separate legal entity, and we’re not anticipating any further changes to our business model as a result.”

Beale, whose dual role is both supervisor and advocate for the market’s 100-something member underwriting syndicates, says that the franchise board chose Brussels over other locations including Luxembourg, Dublin and Malta because of its “robust and quality” regulatory regime.

“At the time, I didn’t even know that reinsurance existed, but once I discovered it I absolutely loved it.” — Inga Beale, CEO, Lloyd’s of London

It also provides access to a multilingual talent pool, is near to London, and, most importantly she stresses, is located in a member state with a “very high certainty of staying in the EU.”

“We want people who reflect our customers,” she said.

“The London insurance market is littered with people from all over the world because London is such a global insurance hub, so we need experts here who speak the language and understand the different cultures.”

North American Footprint

Despite its large European market, it’s the other side of the pond where Lloyd’s really thrives. Approximately 46 percent of its business comes from the U.S., mainly California earthquake and East Coast hurricane risks, she said.

Lloyd’s also remains the No.1 excess and surplus lines insurer in the U.S. and the largest non-U.S. domiciled insurer, she added.

“We have done really well in terms of growing our E&S market share over there,” she said.

“That’s our sweet spot; those non-standard risks that are hard to place.”

By contrast, Beale said that reinsurance has become a much more competitive market with new entrants offering alternative types of reinsurance putting a squeeze on prices. As a consequence, Lloyd’s has focused more on insurance, she said.

“We have also done well in Canada and with our delegated authority through our Managing General Underwriters and Managing General Agents,” she said.

“It’s this very local and specialist distribution channel that has been our success story across North America.”

In January, Beale was made a Dame Commander of the Order of the British Empire — the female equivalent of being knighted — and is also the Association of Professional Insurance Women’s Insurance Woman of the Year for 2017.

“What concerns us most is not individual risks such as earthquakes and hurricanes, but rather assessing the aggregation of our exposures to financial and liability-type risks with no geographical boundaries.” — Inga Beale, CEO, Lloyd’s of London

As the person directing Lloyd’s, she is also acutely aware of the shift in power towards emerging economies, with McKinsey recently reporting that 67 percent of commercial insurance growth will come from those markets by 2020.

Advertisement




In response, Lloyd’s has focused its efforts on Asia and Latin America, transferring more than half of its managing agents to its Shanghai and Beijing platforms; and it was recently granted final approval to open a reinsurance office in Mumbai, she said.

“That’s where the future’s going to be,” she said.

“We know that a lot of the business is no longer coming to London in the traditional way, hence we have set up a Singapore platform and platforms in China, and opened up an office in Dubai as well as in India to be closer to our clients and brokers there.”

Lloyd’s profits last year were flat at $2.7 billion, while GWP was up $3.9 billion.

The market made a profit despite taking a $2.7 billion hit for major claims — the fifth highest such total since the turn of the century — primarily due to Hurricane Matthew and the Fort McMurray Wildfire in Canada.

Although natural disasters are Lloyd’s bread and butter, its real strength is in insuring complex risks, from cargo ships and satellites to political and terrorism risks.

Lloyd’s Role in Cyber

It’s the aggregation of those harder-to-quantify risks such as cyber security that concerns Beale most. Expected to grow to $7.5 billion in global premiums business by 2020, cyber is a big focus for Lloyd’s. It has a 25 percent market share and aggregate limits of approximately $650 million per risk, she said.

“What concerns us most is not individual risks such as earthquakes and hurricanes, but rather assessing the aggregation of our exposures to financial and liability-type risks with no geographical boundaries,” she said.

“We saw that with the financial crisis and the collapse of Fanny and Freddie, and its impact on Greece, but now it’s cyber.

“We have interviewed numerous risk managers and they are telling us that they are only insured against less than 10 percent of the risks that their businesses face on a daily basis. Our challenge is to make sure that we are continuing to adapt as fast as their businesses do and that we are delivering the relevant products that they need.”

Another area where Lloyd’s has seen an uptick is political and terrorism risk, said Beale.

The U.S. standoff with North Korea, Brexit and a swath of ISIS terrorist attacks across Europe have only exacerbated the problem, heightening fears among those countries’ citizens and tearing whole communities apart.

“We would love to get to a stage where a client can track something being quoted or a claim being paid, just like you do with a package being delivered [to your home].” — Inga Beale, CEO, Lloyd’s of London

Just witness the anguish of the victims and families in the Manchester concert bombing.

“We have seen a dramatic increase in demand for these types of products because of the political instability everywhere at the moment, particularly for companies that are trading cross border with countries where governments can suddenly intervene at a moment’s notice,” she said.

“Similarly, businesses are looking to protect themselves against the ever-growing threat of terrorism, which is where Lloyd’s can step in to give them the confidence to keep on trading.”

Reforming Lloyd’s

Within Lloyd’s itself, Beale has been at the forefront of trying to modernize the aging institution. Despite its modern metallic and glass exterior, inside Lloyd’s there’s still very much what some might term a stuffy “old boys’ club” culture.

Men are required to wear a tie and women weren’t allowed into the underwriting room until 1972. Brokers still walk around with leather slipcases crammed full of paper.

The Lloyd’s headquarters on Lime Street.

Beale’s predecessor, Richard Ward, tried to modernize Lloyd’s but left plenty for Beale to address in that respect.

Beale committed $700 million over the next five years to upgrade Lloyd’s aging computer and IT systems, with the end goal of achieving one-touch data capture to speed up the premiums and claims process.

“It’s about following that data all the way through the process from the client to the intermediary and the underwriter, and the processing of the premiums and claims,” she said.

“We would love to get to a stage where a client can track something being quoted or a claim being paid, just like you do with a package being delivered [to your home].”

Another area Beale is keen to shake up is diversity within Lloyd’s itself. Currently the market is two-thirds male, while only 11 percent of the whole London insurance market are non-UK nationals — a damning statistic that Beale is all too aware of.

“The Lloyd’s market doesn’t reflect the demographics of the whole of London and we are very conscious that we’re not tapping into all of the available talent that’s out there,” she said.

“We need to cut out the old ideas, try to challenge the unconscious bias and create an environment that is welcoming for people who are a bit different.”

Beale has also been pushing the [email protected] initiative, currently in its third year, and in September Lloyd’s will host the third annual Dive In festival to promote diversity and inclusion in the insurance industry.

In addition, 95 percent of the Lloyd’s market has already signed up to its Diversity & Inclusion charter to improve diversity, she said.

“To attract the best talent we need to modernize and look at how we can change our working practices and hiring decisions for the better,” she said.

Advertisement




“There’s a vast amount of work that we are actively doing to encourage people to be more open and seek more diverse talent.”

On a personal level, Beale readily admits that she was late to the leadership game, and it was only her mentor, Annette Sadolin at GE, who convinced her to take her first promotion.

That lack of confidence is something that, as a leader, Beale has witnessed in her own team and she is keen to help overcome.

“Annette became very much a mentor for me throughout my career, so whenever I have had to make key decisions I would always ask her view,” she said.

“The key lesson that I have learnt from her is that things move so quickly and you need to take opportunities when they come along that give you exposure to something new, even if they don’t seem like a natural career path at the time.

“For me, being a leader is all about inclusion and being passionate about the people you work with because you need to inspire and motivate them. But there is also nothing more rewarding than watching people progress their careers.”

A Truly Global Journey

Beale, who initially harbored ambitions of being an architect, admits that she “fell into reinsurance,” starting as a trainee international treaty reinsurance underwriter at Prudential Assurance Company in London in 1982. But once she had a taste there was no turning back.

“At the time, I didn’t even know that reinsurance existed, but once I discovered it I absolutely loved it,” she said.

“I fell in love with the global nature of the risks that came to London; one day you could be looking at a piece of business from Chile, the next from Australia.”

But, back then, working in a male-dominated industry where she was the only woman among 35 men, Beale struggled to fit in. So she quit and went travelling for 10 months.

It was during her time as a receptionist at the BBC in Sydney, Australia that Beale worked under her first female boss, a formidable woman, she said.

Inspired by her boss’s strong work ethic, Beale decided to return to the insurance business.

She soon landed a job with GE Insurance Solutions in Kansas City, where she held various underwriting management roles, before being appointed president of GE Frankona and head of continental Europe, Middle East and Africa for GE Insurance Solutions in Germany.

Advertisement




After 14 years at GE, Beale moved to Switzerland with Converium as group CEO in 2006.

Two years later, she joined Zurich Insurance Group as a member of the group management board in Zurich before being appointed global chief underwriting officer, prior to her appointment as group CEO at Canopius in 2012.

The breadth and depth of her experience makes Beale a natural fit for the demands of the Lloyd’s top job.

There’s no doubt she’ll be drawing upon every ounce of that expertise and experience to keep Lloyd’s at the cutting edge of this harrowing new world we live in.

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]