Governor Pritzker Signs Workers' Compensation Law That Will Significantly Impact Illinois Employers
Illinois Senate Bill 1596
On May 17, 2019, Governor Pritzker signed Senate Bill 1596 into law. This new law imposes radical changes to Illinois public policy and was introduced and funded by the Illinois Trial Lawyers Association (composed primarily of plaintiffs’ lawyers) to override the Illinois Supreme Court decision in Folta v. Ferro Engineering. In Folta, the Court held that the Workers’ Compensation Act and Occupational Disease Act was the exclusive remedy to Illinois employees who suffered latent injuries (i.e. ones that are concealed and do not manifest for a long period of time).
This 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/her employer, taking the claim outside of the industrial commission.
- 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%.
Here are a few examples of latent injury cases that could be brought under this new law, again dependent upon whether the employee can successfully prove that the injury did not manifest until more than 25-years: lead poisoning, black lung (pneumoconiosis), mesothelioma and asbestosis, silicosis, skin cancer, lung cancer, occupational asthma, byssinosis, carpal tunnel syndrome, repetitive strain injuries, hearing loss, and traumatic brain injury.
How does this affect your insurance and ability to pay for a claim? Unfortunately, there's no clear cut answer. Insurance policies, as they stand today, aren’t designed to address this type of limitless civil exposure. General liability policies have a standard exclusion for civil claims against the employer. Depending on which industry experts you ask, there's no consensus as to whether or not the Employer’s Liability (EL) section of workers’ compensation may respond (most believe it won’t). Until the first case presents itself, it's too soon to tell if policies will respond at all, and if policy wording will be broadly interpreted to cover this type of unknown exposure.
The practical effect of this law is to subject Illinois employers to unlimited personal liability for employees’ latent injury claims, and at the same time, potentially strip Illinois employers of insurance for such claims. Perhaps the State of Illinois believes insurance companies will adjust and provide coverage endorsements for these types of claims. However, those types of endorsements are likely to be enormously cost-prohibitive – if insurance companies decide to even offer them. The reason is such latent claims likely result in severe injury and death, especially for asbestos exposure or other similar types of latent injuries.
At this time, it’s not clear whether the new law will be applied retroactively or prospectively to cases. The new law doesn't discuss this issue, and there are constitutionality concerns on whether a new law can apply to cases that were barred by statute when originally filed. Assurance will continue to closely monitor this bill and its effects on Illinois employers.
Visit the Illinois Legislature’s website for the full text of the new law: http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=082003050K5
Reach out to a member of the ‘A’ Team for any question regarding this new change or ways to decrease workers’ compensation costs.
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- 7 Easy Steps to Reduce Workers’ Compensation Costs Now
- Webinar Replay: Effective Management of WC Claims
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