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“Mega” workers compensation claims from the construction sector comprised approximately 40% of large claims from 2001 to 2017, yet made up 20% of indemnity claims, according to research released Tuesday by six ratings agencies including the National Council on Compensation Insurance and the Workers’ Compensation Insurance Rating Bureau of California.
Researchers analyzed comp claims that surpass $3 million in costs, analyzed comp claims that surpass $3 million in costs, finding that while such mega claims are “relatively infrequent” compared with the more typical compensation claim, such claims are a “highly unpredictable component” of the industry.
“With medical advances, improving mortality patterns particularly for those with serious injuries, increasing prevalence and cost of home health care and reform-related cost reductions in some states,” the report hints that the cost of these claims may be increasing.
Approximately 4,500 claims from accident years 2001 through 2017 were reported as of Dec. 31, 2018, with incurred loss in excess of $3 million at 2018 cost levels, which is approximately one out of every 2,500 reported indemnity claims.
Of those, 57% were between $3 million and $5 million, 33% between $5 million and $10 million and 10% in excess of $10 million, according to the report.
The report also found that the rate of reported mega claims dropped sharply during the Great Recession as construction employment plummeted in most of the country. Since 2013, the share of mega claims has increased steadily with the estimated accident year 2017 mega claim counts hitting a 12-year high.
Other highlights of the report include:
A woman collecting workers compensation survivor benefits after her husband was killed when he was trapped between two industrial cranes in Pennsylvania cannot sue a crane company and its subsidiaries for negligence, as the state’s workers compensation laws bars such suits, among other reasons, a federal appeals court ruled Thursday.