In Good Faith
Raise your hand if you knew that, as an adjuster, your individual assets could be at risk if you or your company are accused of acting in bad faith in the handling of a workers’ compensation claim.
For those who don’t know, the penalties can be staggering.
That was one of the more startling messages delivered by a pair of presenters at the National Workers’ Compensation and Disability Conference® & Expo in Las Vegas on Thursday.
Sandra Little, director of enterprise risk, Bar-S Foods, and attorney Robert Vaught, a partner with Phoenix-based Quarles & Brady LLC, were the co-presenters in a morning session that cautioned attendees on the multi-million dollar penalties levied against employers and insurance carriers accused of acting in bad faith.
There are currently 13 states that allow injured employees to file civil actions claiming their rights under the legislative protection of workers’ compensation were denied.
Ohio, Arizona, Minnesota and Colorado are among those states where a failure to reasonably investigate and settle a claim can result in punitive damage rulings that fall outside the “exclusive remedy” of workers’ compensation.
Training adjusters and other stakeholders in best practices for communicating with injured parties and documenting that training is one risk mitigation technique that should result in better outcomes, Little and Vaught counseled.
But it will also benefit risk managers and their employers to keep abreast of legislative and judicial trends across the country.
States have varying definitions and standards for what constitutes bad faith, Vaught said. In some jurisdictions, a company’s practice of sending injured employees to selected physicians can be construed as bad faith, particularly if it can be documented the physician established a pattern of determining the injuries were non-compensable.
The first thing that will get handed over to a claimant’s attorney in the event of a bad faith filing will be the claim adjuster’s file, the presenters said. &