Loss of consortium claims hampering WC subrogation efforts
Once the realm of major accidents and deaths, workers’ comp carriers are facing loss of consortium claims for a range of incidents such as car accidents.
Loss of consortium claims can hamper the ability of workers’ compensation carriers to maximize subrogation recoveries. This is in addition to preventing a carrier’s ability to assert a third-party credit in any ongoing workers’ compensation litigation, according to Saerim Luciano, senior counsel and chair at Pearlman, Brown & Wax.
“A workers’ compensation carrier can only assert a credit in the Workers’ Compensation Appeals Board (in California) against the injured worker only,” she tells PropertyCasualty360.com. “Therefore, if part of the civil settlement is allocated to the injured worker’s spouse, then that part of the settlement funds are untouchable.”
PC360: What is driving this trend?
Luciano: Plaintiffs’ attorneys are solely driving this trend. Typically speaking, we would only see loss of consortium claims with larger injures and larger losses. Now, we are seeing a loss of consortium claim asserted by the injured worker’s spouse for minor injuries and even incidental car accidents.
PC360: How is this impacting the cost of workers’ comp?
Luciano: Subrogation efforts directly return money to the workers’ compensation carriers. Carriers can only make money through premiums or subrogation efforts. As such, successful subrogation efforts and maximum recoveries can positively affect an insured’s experience rating, directly affects the experience modifier and can also lead to reduced premiums.
PC360: What impact is this having on workers’ comp carriers?
Luciano: Workers’ compensation carriers are getting a smaller slice of the settlement “pie” when another potential claimant (spouse) asserts their damages in addition to the injured worker.
PC360: What can workers’ comp carriers do to get in front of this issue?
Luciano: In order for employers to obtain favorable outcomes, they must be prepared to actively intervene and litigate damages. This will put them in the optimal situation of recovering, thus removing the threat of any consortium claim losses.
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