3. Liberty Mutual accused of overcharging
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A former workers compensation client brought a lawsuit against Liberty Mutual Insurance Co. in October accusing the insurer of overcharging.
A story about the case was the third most read item on Business Insurance’s website in 2019.
The putative class action, Valley Container Co. v. Liberty Mutual Inc., was filed Oct. 15 in the U.S. District Court for the District of Massachusetts in Boston, alleging claims of breach of contract and unjust enrichment, as well as violations of the Racketeer Influenced and Corrupt Organizations Act and Massachusetts laws. As of December, the only movement on the lawsuit has been a motion made Nov. 29 for an extension to file a response.
In the complaint, Bridgeport, Connecticut-based Valley Container Co. accused Boston-based Liberty Mutual and its affiliates of “systematically, willfully and unlawfully” overcharging companies in at least 35 states for workers compensation insurance and engaging in misconduct.
Valley Container contended that after its employee suffered a workplace injury and filed a claim that Liberty accepted, the insurer recovered all but $120 of the $47,000 claim from a third-party lawsuit but allegedly didn’t inform Boca Raton, Florida-based National Council on Compensation Insurance. This, the company claimed, led NCCI to use the wrong experience modification rating and resulted in an artificially inflated premium for Valley Container in 2014 and 2015.
Valley Container also accused Liberty Mutual of taking advantage of its relationship with NCCI to “defraud employers and obtain and retain greater premium amounts” in the states where the NCCI is the designated rating and statistical organization, by purportedly taking advantage of NCCI’s “lack of oversight and diligence” and “inaccurate data” to calculate premiums.
A spokesman from Liberty Mutual said the company does not publicly discuss litigation.
