Breaking News: Changes to Illinois Workers' Compensation Are Coming
It did not take long for the new administration to swiftly introduce and pass House Bill 3418 and Senate Bill 1596. Both bills are radical changes to Illinois public policy, introduced to override the Illinois Supreme Court decision in Folta v. Ferro Engineering. In which the court held that the Workers’ Compensation Act and Occupational Disease Act was the exclusive remedy to Illinois employees who suffered latent injuries such as mesothelioma, radiation, or beryllium. This proposed legislation was introduced and funded by the Illinois Trial Lawyers Association (composed primarily of plaintiffs’ lawyers). Senate Bill 1596 is expected to be signed into law by Governor Pritzker soon.
This proposed new law will have serious consequences for Illinois employers:
- It will remove the exclusive jurisdiction of latent injury work-related claims (injuries diagnosed after 25-year statute of repose) from the Illinois Workers’ Compensation Commission
- It will create the ability for an employee with a latent injury to file a direct action against his employer
- It will remove the statute of repose under the current IL Workers’ Compensation Act
- It allows for plaintiff’s attorneys to recover double the amount of their fees that will be paid to the injured workers from 20% under the current law in the workers’ compensation system to 40%
How does this affect your insurance and ability to pay for a claim? Illinois employers will be surprised to learn that they are suddenly uninsured for claims under this proposed legislation. All general liability policies have a standard exclusion for any civil claims against the employer. The effect of this proposed law is to subject Illinois employers to unlimited personal liability for employees’ latent injury claims, and at the same time strip Illinois employers of their insurance for such claims.
This result could potentially bankrupt an employer. Perhaps the State of Illinois believes insurance companies will adjust and provide endorsements for these types of claims. However, those types of endorsements are likely to be enormously cost prohibitive – if insurance companies will even offer them. The reason for such latent claims likely results in severe injury and death, especially in asbestos exposure or other similar types of latent injuries.
Below are resources to the Illinois Legislature’s website which provide the history and text of the proposed legislation:
Reach out to a member of the ‘A’ Team for any questions regarding these changes or ways to minimize risk in the workplace.
- Workers’ Compensation Videos
- Workers’ Compensation E-Book
- 7 Easy Steps to Reduce Workers’ Compensation Costs Now
- Webinar Replay: Effective Management of WC Claims
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