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Insurance Recovery
OVERVIEW

Workers’ Compensation and Employers’ Liability Sophisticated approach

Separate from questions about the benefits an injured worker may be able to recover under state workers’ compensation laws, our attorneys help employers with insurance coverage issues that may arise from workers’ compensation claims. 

Our attorneys are adept at helping confirm coverage for the possibility of employer liability under the limited circumstances in which an employer could face civil litigation outside the workers’ compensation system regarding an employee’s injury. We also help employers handle issues that are less about the scope of coverage under the insurance policy and more about complex workers’ compensation programs and the financing of those arrangements. 

We also advise on claims mishandling problems for clients that have loss-sensitive programs featuring large deductibles or retrospective premiums. 

Notably, we have helped clients combat insurance company tactics such as misclassifying workers or entire businesses into class codes for riskier job duties that generate higher premiums. With all of these issues, we have deep experience in court, in arbitration, and in direct negotiation with insurance companies and third-party administrators.

Barnes & Thornburg’s Insurance Recovery and Counseling group represents policyholders exclusively. Several of our attorneys, however, represented insurance companies before they joined our firm and that experience continues to provide valuable insight into how insurance companies think and operate.

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EXPERIENCE

Insurance Coverage for Claims by Injured Employees

  • Our attorneys have litigated against insurance companies for denying coverage under WC/EL policies. For example, a policyholder’s employee may assert intentional tort claims in court to try to recover more than the statutory benefits provided by the workers compensation system. The insurance company may try to deny coverage of such a claim, citing exclusions related to intentional conduct. But those exclusions do not necessarily apply or relieve the insurer of all duties to the policyholder. Our attorneys have substantial experience litigating against insurance companies in this type of situation.

Claims Mishandling

  • Our attorneys won millions of dollars for a client whose workers compensation claims had been mishandled by its TPA. Our client was a group of fast food restaurant owners that banded together and formed an entity that the state authorized to self-insure the workers compensation claims for all the restaurants. Our client hired a TPA, which happened to be a subsidiary of a workers compensation insurance company, to handle all the claims. The client started to hear negative feedback from its member-owners and their injured employees about problems such as missed deadlines, incorrect decisions about whether particular claims were compensable under state law, and miscalculations of benefits properly owed to employees. Eventually, the client noticed that its overall claim costs appeared to be escalating significantly above its well-established history, but the TPA disclaimed responsibility. We filed a lawsuit and obtained the TPA’s internal files showing, among other things, that the TPA’s internal auditors knew there were pervasive problems on our client’s account, but the TPA’s management had withheld that information from the client. We also retained an expert witness who, in addition to having over 30 years of experience adjusting workers compensation claims, had written the official study guide of the state’s adjuster licensing exam. We obtained access to the TPA’s claim system, allowing our expert to carefully review the TPA’s internal files on dozens of claims that revealed rampant mishandling and led to his expert opinion that there were patterns and practices that likely pervaded the roughly 3,000 claims handled by the TPA. In contrast, we won a Daubert motion to strike the TPA’s expert witness, who had run the claim departments of several major insurance companies but had never himself handled a workers compensation claim and was not licensed in the relevant state. Our attorneys tried the case to a federal judge, who awarded several million dollars in damages measured by the overall increase in the client’s claim costs during the period of the TPA’s mishandling. Our attorneys also argued the insurance company’s appeal, and the federal appellate court affirmed the multi-million dollar judgment for our client.

Premium Disputes

  • Our attorneys have fought on behalf of multiple clients whose insurance companies overcharged premiums by misclassifying the clients’ workforce. For example, we have helped several clients that operate elder care facilities. Insurance companies disregarded job descriptions and classified office staff as workers directly involved in resident care, which involves higher risk and generates higher premiums. Our attorneys have also assisted temporary staffing companies and professional employer organizations (PEOs), for which workers compensation is not only a fundamental legal requirement but also can be the single largest cost of doing business. Our attorneys have helped clients show that the insurers used higher-risk class codes for individuals or even entire PEO client companies, resulting in inflated premiums. But these kinds of issues can arise for almost any employer in virtually any industry. Our attorneys have represented clients in litigation, arbitration, and negotiation to obtain class code corrections and fairer premiums.
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