Insurance expert witness advises on city’s failure to give notice of excess claim by injured employee

The city, its claims administration personnel and its legal counsel initially misevaluated the exposure on the underlying claim because they failed to account for certain offsets. Further, the claims team failed to allow for the potential/likelihood that the employee would be entitled to supplemental benefits beyond the age of 62.

Regarding notice, the city was required by the policy to provide prompt notice to the insurer of any claim or action commenced against the city that exceeds, or is likely to exceed, 50 percent of the self-insured retention per occurrence. Based on the nature of the injury/claim alone and the average weekly wage of the claimant, it should have been apparent to the city at the initial stages of this case that the exposure was likely to exceed 50 percent of the self-insured retention.

Additionally, the city failed to use “diligence, prudence, and good faith in the investigation, defense and settlement” of the underlying claim because the city unreasonably refused to even engage in settlement negotiations with the employee and his counsel, or to even extend any settlement authority in an attempt to resolve the claim. The claimant is a long-time first responder with a heart condition that is statutorily presumed to be work related, and who earned a relatively high average weekly wage.

It is generally accepted and good faith claims practice for the employer to present settlement options to the claimant and his counsel with proposals that might be mutually beneficial and found acceptable by the claimant.

The expert has decades of experience in workers’ compensation law, claims administration and practice and has published and spoken extensively on the subject.