The loss of consortium claims may hamper the ability of workers’ compensation companies to maximize recoveries by subrogation. According to Saerim Luciano, senior counsel and president of Pearlman, Brown & Wax, this is in addition to a carrier’s ability to assert third-party credit in any ongoing workers’ compensation litigation.
“A workers ‘compensation carrier can only claim credit with the Workers’ Compensation Appeals Board (in California) against the injured worker,” she told Propertycasualty360.com. “Therefore, if a portion of the civil settlement is allocated to the injured worker’s spouse, then that portion of the settlement funds are untouchable. “
PC360: What is driving this trend?
Luciano: The plaintiffs’ lawyers are the only drivers of this trend. Typically, we would only see losses from consortium claims with injuries and larger losses. Now we are seeing a consortium loss claim claimed by the injured worker’s spouse for minor injuries and even accidental car crashes.
PC360: What is the impact on the cost of workers’ compensation?
Luciano: Subrogation efforts return money directly to workers’ compensation companies. Carriers can only make money through bonuses or subrogation efforts. As such, successful subrogation efforts and maximum recoveries can positively impact an insured’s experience rating, directly affect the experience modifier, and may result in reduced premiums as well.
PC360: What impact does this have on mobile operators?
Luciano: Workers’ compensation companies get a smaller share of the settlement “pie” when another potential claimant (spouse) claims damages in addition to the injured worker.
PC360: What can mobile operators do to deal with this problem?
Luciano: For employers to obtain favorable results, they must be prepared to actively intervene and to litigate for damages. This will put them in an optimal recovery situation, thus eliminating the threat of any loss of the Consortium’s claim.