Q. Why is this subject important to my business?
For over seventy years, employers were only liable for occupational diseases suffered by employees through workers’ compensation. This meant that insurers, or self-insured workers’ compensation programs, provided full insurance coverage for medical treatment and disability benefits under the Missouri Workers’ Compensation Law, regardless of the amount. This was full coverage and employers paid nothing other than their premiums for their insurance policies or self-insured workers’ compensation programs.
That is no longer merely the case. Now, employees who suffer occupational diseases may sue employers for occupational diseases that arise out of and in the course of employment, provided that the employer submits the employee to work in a negligently unsafe workplace.
Q. How did this happen?
The Missouri Court of Appeals — Western District ruled that employers are subject to lawsuits, and therefore no longer entitled to immunity under the Missouri Workers’ Compensation Law, in State ex rel. KCP&L Greater Missouri Operations Co. v. Cook, 353 S.W.3d 14 (Mo.App. W.D. 2011). The Court held that the 2005 amendments to the Missouri Workers’ Compensation Law removed the immunity that employers previously had from lawsuits for occupational diseases suffered by employees.
Q. What is an occupational disease?
An occupational disease is any identifiable disease or medical condition that happens to arise out of and in the course of employment (because of and during the job). Occupational diseases arise from general working conditions, and not from single events such as an accident, an identifiable event, or assault. Examples of occupational diseases include damage to bodily organs such as the lungs, heart, and kidneys; repetitive trauma such as carpal tunnel syndrome and rotator cuff injuries; mental illness; heart attacks; and degenerative medical problems in which the work environment is the prevailing factor in prompting the degenerative condition.
Q. What timeframe should I be worried about?
The general statute of limitations for bringing a personal injury action applies. That is five (5) years from the time that the medical condition becomes capable of being known. An occupational disease may not be capable of being known until the employee has a reasonable basis to believe that a condition exists and has suffered some type of damage, such as incurring medical expenses, undergoing medical treatment, or losing wages from work. Importantly, it should be remembered that many occupational diseases that concern respiratory or skin exposures and which damage bodily organs may have a long latency period. For example, an employee may not have been exposed to a dangerous work environment since 1995, but the disease arose in 2010. The statute of limitations would not conceivably expire until 2015 in this example.
Q. Is anything being done about this?
The Missouri General Assembly considered legislation that would have reinstituted the immunity for employers during this past legislative session. The General Assembly declined to pass this proposed legislation that was being negotiated with the governor. Those in the industry who did not endorse this proposed legislation, or who were at least not enthusiastic about it, believed that the benefit afforded employees in this proposed legislation did not make it economically advantageous to employers. This, however, misses an important point. Employers are now still potentially liable for damages in excess of potential insurance coverage and punitive damages since no immunity is in place and the General Assembly will not review this subject until the 2013 legislative session.
Q. What should I do?
There are two basic steps that employers should take when addressing this subject. First, manage the risk. Second, maximize possible insurance coverage.
Examples that employers can take to manage the risk include the following:
- Personally inspect and assess the workplace for risk. This may include “walk-throughs” in work areas. It may also include interviews with supervisors who have the most direct contact with employees. Also do not forget the suggestions of well-intentioned employees.
- Read loss run reports for workers’ compensation and personal injury claims to identify “hot spots” for liability. Loss run reports for an employer’s workers’ compensation or personal claim history are available from insurance companies, third-party administrators, and insurance agents.
- Consider a safety audit by an industrial hygiene/engineering firm if the budget permits. These can be quite valuable in identifying the potential for both accidental injuries and occupational diseases. Employers should balance the cost with the benefits to be gained. Likewise, some insurance companies and third-party administrators offer these audits at a reduced rate or no additional fee.
- Carefully draft, publish and reasonably enforce safety rules.
- Provide guards and warnings for existing equipment and provide personal protective equipment.
- Training. Employers should consider training on workplace safety during employee orientation, refresher courses, regular meetings, or when risks arise from new operations. Many employers believe, and for good reason, that safety can be integrated into the production process.
- Delegate the responsibility of the safety program to a specific senior management employee and hold that employee accountable. Employees will understand that a company is serious about safety when a senior-level official is responsible for the program and enforces its terms. Accountability should not focus on whether any claims arise, but on the overall quality of the program instead.
- Consider more stringent hiring of applicants who will more likely be competent employees. This recommendation should, of course, be integrated with existing HR procedures and should not otherwise be used to discriminate against applicants of protected status or class.
- Manage the coordination of safety records. A safety program is only as good as the documentation that confirms its existence. If an employer takes the present as an opportunity to improve its safety program, this documentation should be incorporated in previous records. Just as important, programs should be frequently monitored and updated to record safety precautions to be taken in the future.
Examples that employers can take to maximize insurance coverage include the following:
- Employers should identify insurance policies that may cover such claims and attempt to purchase coverage if practical and economically feasible. Employers would be well advised to consult with their insurance brokers or agents to determine if present policies afford coverage. The portion of the traditional workers’ compensation known as “Part B” likely provides such coverage. This coverage, as virtually all other insurance policies, however, will have a policy limit. Other polices may conceivably afford coverage. Examples include comprehensive general liability policies, auto liability policies, professional liability policies and builders risk policies. However, there are likely exclusions that insurers will use to exclude coverage for these claims. There is no substitute for legal counsel, in conjunction with other insurance professionals, to review existing and potential policies.
- Require indemnification and hold harmless provisions in contracts with vendors. Employers, when practical, should require indemnification and hold harmless provisions which not only protect the employers, but also the individual employees of those employers. These provisions should be secured by insurance policies which identify your business as an additional insured under the policy.
- Settlement of workers’ compensation claims should ideally include a release of liability. Those interested in further information should contact the law firm in the contact information located in this website.