Cynthia Kane, 58, allegedly suffered shortness of breath due to breathing in petroleum fumes over a prolonged period. Kane had already “lawyered up,” so a statement was out of the question. Her file during her 15 years with Union Manufacturing raised no suspicions. Kane was a nonsmoker, and she had never complained to the company nurse about pulmonary problems.
I arranged to tour Kane’s work location. It was separated from the machine shop, where the actual manufacturing took place, by a floor-to-ceiling wall with glass windows. The assembly area was not particularly dirty, and I verified that the HVAC system was up to specifications and maintained twice annually.
Kane didn’t appear to be in any distress as she did her job.
Kane’s shift ended at 5 p.m., so I returned to the plant at 4:45 that afternoon and waited in the parking lot. I followed her as she made her way home in a fairly new two-door sports car. She stopped at a dry cleaner on the way. I parked and waited nearby for 10 minutes. When she didn’t come out, I decided to
This was a large operation with the cleaning machines in the back room. There were huge fans throughout the store, but even so there was an unmistakable kerosene-like smell from the solvents used in the dry cleaning process.
At the counter, I asked the clerk about dry-cleaning bedspreads while I strained to see into the back of the store. It was evident Kane was working.
I scratched my head. Why didn’t her attorneys name the shop as a co-defendant on the claims petition? It had far greater pulmonary exposure to airborne contaminants than Union Manufacturing.
The next day, I went back to the dry cleaner and asked to speak with Kane. The flustered counter person said they had no employee by that name. I went back to the dry cleaners three more times during the next two weeks, and each time, I saw Kane’s car there.
I arranged to have a disability evaluation by a pulmonologist, who confirmed that Kane had a mild pulmonary disability (5 percent PPD rating). After reading my report, the doctor concluded the condition was not due to her work at Union Manufacturing. Kane’s attorney had a disability report rating Kane at 25 percent PPD.
I couldn’t fault Kane for wanting a part-time job to help pay for living expenses (and her sports car), but she left me no choice but to deny the claim against Union.
I called her counsel and explained that we’d have to go to trial. He was incredulous, until I explained my findings.
“Your client didn’t tell you about her ‘under the table’ deal at Salerno’s Dry Cleaning, did she?” I asked him. “I personally observed her working there on three different occasions, and noted the smell of the dry cleaning solvent was very strong.
“I am willing to bet that exposure is the proximate cause of any pulmonary disability she has, rather than from a clean and temperature-controlled environment at Union Manufacturing Co. My examining physician agrees.”
The attorney reluctantly agreed to withdraw the petition. Kane continued to work at Union, and whether she kept her night job at the dry cleaner wasn’t my concern. A good investigation paid off and the claim against Union Manufacturing hit a snag.
Workers’ Comp Docket
Bartender Serves Up Compensable Claim for Injury Due to Hugging Incident
LaFave v. Blue Lounge, 30 MIWCLR 39 (Mich. W.C.B.M. 2016)
Ruling: The Michigan workers’ compensation magistrate awarded benefits to a bartender, who injured her back while hugging an overly enthusiastic bar patron.
What it means: In Michigan, a worker’s injuries are compensable when the accident occurred while she was acting within the scope of her duties.
Summary: The magistrate awarded benefits to a bartender, who injured her back while hugging an overly enthusiastic bar patron. A video showed the two hugging and each woman lifting the other off the ground.
Finding the incident did not fall within the social and recreational exclusion, the magistrate explained that the bartender was performing her duties when the incident occurred. She was approached by a patron, whom she happened to know, and was hugged. As part of the hug each woman lifted the other off the ground. A bartender is expected to be pleasant and polite to the customers.
Also, immediately before the patron greeted and hugged the bartender and immediately after the incident she was engaged in her regular bartending duties. Being polite to an overly enthusiastic patron would arguably fall within the bartender’s duties.
The magistrate accepted the bartender’s uncontroverted medical evidence of disability and awarded benefits for a closed period. The magistrate denied benefits for her concurrent employment since she continued working there throughout the closed period. The magistrate also found that the bartender was entitled to reasonable and necessary medical expenses related to her treatment for her post-traumatic myofascial pain and low back strain.
Worker Wins Benefits for Accident During Personal Errand
Colquitt v. Starr Aviation, 31 PAWCLR 93 (Pa. W.C.A.B. 2016)
Ruling: The Pennsylvania Workers’ Compensation Appeal Board affirmed the workers’ compensation judge’s finding that an agent’s injury arose out of and in the course of her employment.
What it means: In Pennsylvania, a worker’s temporary departure from performing her work to administer to her personal needs does not take her out of the course and scope of her employment.
Summary: The board affirmed the workers’ compensation judge’s finding that an airport ramp agent, who injured her left leg when the tug she was driving flipped over, was entitled to benefits. Her injuries arose out of and in the course of her employment.
The agent was given permission between flight arrivals to drive the tug to the other side of the terminal to meet her mother, who was bringing her money and feminine hygiene products. The board explained that because the agent was simply going to meet her mother, her injury occurred during a temporary departure from work during regular business hours, and therefore, her work injury fell under the personal comfort doctrine.
The board said that the employer’s arguments would have it consider whether the trip to meet her mother was necessary. The board explained that workers’ compensation is “no-fault” and there was no such precedent, so it rejected the argument.
The board also found that the employer’s argument of whether the agent was on the employer’s premises when she was injured was moot. There was no requirement that the agent be on the employer’s premises at the time of her injury because she was engaged in the furtherance of the employer’s affairs.
Employee Can’t Be Disqualified From Benefits Due to Violent Thoughts
Cory Fairbanks Mazda/The PMA Insurance Group v. Minor, No. 1D15-1600 (Fla. Dist. Ct. App. 05/25/16)
Ruling: The Florida District Court of Appeal held that a worker was entitled to temporary partial disability benefits.
What it means: In Florida, malevolent thoughts alone, without evidence establishing an intent to harm, do not establish misconduct.
Summary: An office worker for Cory Fairbanks Mazda sustained compensable workplace injuries to her head, neck, low back, and left knee as a result of two incidents of being struck by a door opened by a coworker. The worker thought that the coworker intentionally injured her. The worker received medical care for her injuries and returned to work with accommodations.
Later, the worker’s attorney informed the judge of compensation claims and the employer that the worker “expressed suicidal and homicidal ideation,” but not to the degree of imminent threat. The employer terminated the worker based on the attorney’s representation.
The employer and its insurer argued that the worker was ineligible for temporary partial disability benefits because she was terminated for misconduct. The Florida District Court of Appeal held that the worker was entitled to temporary partial disability benefits from the date of her termination.
After an examination, a psychiatrist described the worker’s expressions of anger as “blowing off steam” rather than declaring an intent to inflict physical harm. The worker said that she told her attorney that she wanted to punch the coworker.
The employer’s allegation of misconduct was based solely on the attorney’s statement that the worker shared that she had suicidal and homicidal thoughts arising from her injuries. The employer argued that the worker intended to harm or kill the coworker.
The court rejected the employer’s argument, stating that malevolent thoughts alone, without the requisite evidence establishing an intent to harm, do not meet the definition of misconduct.
Driver Allowed to Pursue Texas, Oklahoma Benefits Simultaneously
Maxwell v. Faith Transport, LLC, No. 113832 (Okla. Civ. App. 05/25/16)
Ruling: The Oklahoma Court of Civil Appeals held that it had jurisdiction over a claim brought by a driver.
What it means: Oklahoma may hold concurrent jurisdiction over a claim with another state.
Summary: A truck driver, who lived in Oklahoma, worked for Faith Transport, a Texas entity. He was severely injured in an accident while driving on duty in Texas. Faith’s workers’ compensation carrier, Texas Mutual Insurance Co., initiated payments of workers’ compensation benefits to the driver pursuant to Texas law.
Later, Texas Mutual Insurance Co. sent the driver a letter notifying him of the suspension of his benefits. The driver filed a workers’ compensation claim in Oklahoma. Faith rejected the claim, asserting that Oklahoma did not have jurisdiction over the claim. The Oklahoma Court of Civil Appeals held that it had concurrent jurisdiction with Texas.
The court explained that an Oklahoma worker injured while on the job in another state can pursue benefits from both jurisdictions simultaneously. The court rejected Faith’s argument that the driver’s acceptance of the Texas Mutual Insurance Co. checks amounted to an election of Texas law.
The court found that by filing a claim in Oklahoma the driver elected to initiate an Oklahoma claim. He performed no similar act in Texas. The payments the driver received pursuant to Texas law were voluntarily initiated by Texas Mutual Insurance Co.
The receipt of those benefits was not an election to proceed in Texas. The court explained that the right of election for a claim of benefits belongs to the worker, not an out-of-state insurance carrier.
The court explained that logic and statutory construction led to a conclusion that if the election to file a claim in Oklahoma did not prevent Texas benefits, then the receipt of Texas benefits does not prevent the election of a claim in Oklahoma. The court concluded that the driver was not precluded from electing to file a claim in Oklahoma, assuming that no final decision was reached in Texas.
The court found that the suspension of the driver’s Texas benefits was not the equivalent of a “final determination” because the suspension was subject to review or appeal.
Witnessing Aftermath of Car Accidents Created Compensable Mental Injury
Mantia v. Missouri Department of Transportation, No. ED103016 (Mo. Ct. App. 06/14/16)
Ruling: The Missouri Court of Appeals held that a worker’s mental injury was compensable and that she was entitled to benefits for a 50 percent permanent partial disability of the whole body and future medical benefits.
What it means: In Missouri, under the 2005 amendments to the law, evidence of the work stress encountered by similarly situated workers is not required to establish a claim for a mental injury. A worker must show that she suffered a mental injury resulting from stress that was work-related and “extraordinary and unusual” as measured by objective standards and actual events.
Summary: A worker for the state Department of Transportation provided traffic control and assistance at motor vehicle accident scenes. Over her 20-year career, she witnessed the aftermath of a multitude of serious accidents that involved catastrophic injury, dismemberment, and death. She began to suffer significant emotional and psychological symptoms.
The worker filed a claim for workers’ compensation benefits. The Missouri Court of Appeals held that she was entitled to benefits.
The court found that under the 2005 amendments to the law, evidence of the work stress encountered by similarly situated workers was not required to establish a claim for a mental injury. The worker had to show that she suffered a mental injury resulting from stress that was work-related and “extraordinary and unusual” as measured by objective standards and actual events.
The court found that the worker met this burden. Both parties’ medical experts agreed that the worker’s work-
related stress was the cause of her disability. The court found that witnessing the aftermath of serious accidents placed stresses on the worker more extreme than most workers would ever experience. The court found that the experiences were “extraordinary and unusual” and also “unmistakably exceptional and remarkable.”
The court found sufficient evidence supporting an award for 50 percent permanent partial disability of the whole body. The court also ordered the department to pay for the worker’s future medical care to treat her mental injuries. The court noted that continued antidepressant medication would likely require ongoing medical management by the prescribing physician.
Medical Evidence Shows Preexisting Conditions Caused Manager’s Disability
Buchinsky v. The Arc of Anchorage, No. S-15547, No. 1585 (Alaska 05/25/16)
Ruling: The Alaska Supreme Court held that a manager was not entitled to benefits because the work-related injuries were not the cause of her disability or need for treatment.
What it means: In Alaska, medical evidence that a worker’s preexisting conditions, rather than her work-related injuries, were the cause of her need for treatment will support the denial of a claim.
Summary: A case manager for The Arc of Anchorage sustained injuries when a filing cabinet fell on her twice in one week. The manager sought benefits. The Arc disputed the claim after its doctor said that the work-related injury was not the substantial cause of the manager’s later need for medical treatment.
The Alaska Supreme Court held that the manager was not entitled to benefits because she did not show that the work-related injuries were the cause of her disability or need for treatment.
The court found that substantial evidence supported a conclusion that the manager’s preexisting orthopedic problems, rather than her work-related injury, were the substantial cause of her disability and need for medical treatment of her knees, back, and neck.
One doctor compared MRIs of the manager’s neck both before and after the work injury and determined that the MRIs were almost identical. Imaging studies of her knees showed considerable arthritis before the work injury. A doctor told the manager after the work injury that she did not need knee surgery because her knee problems were due to her arthritis.
Also, a month before the work injury, the manager and a neurosurgeon discussed neck surgery to resolve her complaints related to pain and numbness.
The court pointed out that continuing pain after a work-related injury does not mean that the work-related incident caused the pain.
The court also noted that in this case the medical records did not show an immediate increase in pain in the period after the injury. The manager’s chiropractor released her to return to work without restrictions less than a week after the second incident. Her pain complaints increased a month later.
To Keep Cool in a Crisis, Companies Need a Comprehensive Solution
Threats against corporate security come in many forms, from intentional acts of violence to civil unrest to cyber-attacks. The perpetrators don’t discriminate by company size or sector, and the consequences can range from several thousand dollars lost to several lives lost.
The recent shooting in an Orlando nightclub that killed 49, for example, or last year’s San Bernardino shooting that killed 14, are somber reminders that terrorism and violence can erupt anywhere and in any type of business. In addition to loss of life, violence can translate into business interruption and property damage. In Ferguson, Mo., riots lead to over $4 million in property damage.
Cyber-attacks have also become commonplace, with hackers infiltrating private networks to steal data or hold it ransom.
Is your organization prepared for these risks?
“A lot of companies have a crisis response plan on paper, but they don’t have outside resources to come to their aid if there is an incident,” said Reggie Gibbs, Underwriter and Product Manager, Starr Companies.
Mid-size companies especially tend to lack comprehensive insurance coverage and crisis management services for a variety of security events due either to limited resources or an underestimation of their exposure.
Starr Companies’ Cyber and Terror Response (CTR) solution provides three coverages as well as crisis response services tailored to meet the needs of these companies. Each of its components addresses a common security threat.
“We don’t just want to indemnify the security risks our clients face; we want to help them actively manage them.”
— Reggie Gibbs, Underwriter & Product Manager, Starr Companies
Terror and Political Violence
“Political violence can be defined as a strike, riot, protest, or any type of unrest that gets out of hand and turns violent,” said Gibbs, who specializes in terrorism and political violence, workplace violence, and crisis management.
In the case of the Ferguson protests, any first party property damage or third party liability incurred by the disruption would be covered under the terrorism and political violence segment of the CTR solution.
In the case of a terror attack, organizations cannot necessarily rely on TRIA to pick up property losses. In the case of the Orlando shooting, for example, the likelihood of TRIA being invoked is low because property damage will not meet the threshold for coverage to kick in.
TRIA, reauthorized in 2015, provides a federal insurance backstop in the event of a terror attack. The U.S. Secretary of the Treasury, U.S. Attorney General, and U.S. Secretary of Homeland Security must declare an attack to be an act of terrorism, and property damage must exceed $5 million to trigger TRIA.
“We would still view the Orlando shooting as an act of terror, however, because of who the shooter claimed he was working for regardless if the ties to terror groups are clear or not. Therefore, our coverage would apply,” Gibbs said. Even if TRIA was enacted, however, companies would still have a lot of pieces to pick up following an attack. They may have injured or deceased employees, or face legal action from third parties.
For these situations, and any other incident of violence not driven by terrorism, the workplace violence component of Starr’s CTR solution would act as an umbrella to cover other liabilities such as legal liability, loss of life benefits, psychiatric care, and other crisis response services.
One such incident struck a Boston-area Bertucci’s in early May. An attacker wielding a knife drove his car into a Boston shopping mall before making his way into the nearby restaurant. He killed five, including restaurant workers and patrons.
“There was no ideological or political motivation behind it. He was just deranged.” Gibbs said. “Our workplace violence coverage can handle the loss of life benefits for both the employees and patrons killed in situations like this one.”
In the best cases, though, violence can be prevented altogether.
“If an employee reports a stalking threat, the policy would cover the expense of security guards,” Gibbs said. “In this case, it’s more of a pre-workplace violence coverage. It would de-escalate the situation.”
Attacks can also be non-physical.
Cyber extortion in particular is on the rise. Phishing scams lead employees to click on malicious links, unknowingly downloading ransomware onto their internal networks. The cyber criminals then hold companies’ networks ransom, asking for a sum of money in return for the release of data or to prevent a business interruption. The ransoms can be low — amounts that organizations can afford to pay.
“The hackers don’t want to attract the attention of law enforcement or regulatory agencies,” said Annamaria Landaverde, National Cyber Practice Leader & Professional Liability Underwriting Manager, Starr Companies. Landaverde specializes in the cyber component of the CTR coverage. “The FBI may not get involved if someone asks for $5,000. They are more likely to get involved if someone asks for $5 million.”
Since companies are not required by law to report cyber extortion —like they are for data breaches — many choose simply to pay the ransom and move on without generating any negative news headlines.
“The hackers don’t want to attract the attention of any law enforcement or regulatory agencies. The F.B.I. won’t get involved if someone asks for $5,000. They will get involved if someone asks for $5 million.”
— Annamaria Landaverde, National Cyber Practice Leader & Underwriting Manager, Professional Liability Division, Starr Companies
“A California medical center recently had an incident like this where the hackers asked for $17,000 in ransom,” Landaverde said,” but the amounts can vary.”
While the ransom itself may seem manageable, many companies fail to recognize other costs associated with the identification and removal of the malware from their system. There may also be costs associated with forensics investigations, legal experts, public relations firms, third party lawsuits, and notification and credit monitoring.
“The cyber arm of the CTR coverage extends to liability that an organization would suffer as a result of a breach, or failure of security of the insured’s network,” Landaverde said. That includes not just cyber extortion, but outright data theft or denial-of-service attacks.
Crisis Management Services
“We don’t just want to indemnify the security risks our clients face; we want to help them actively manage them,” Gibbs said.
The fourth component of Starr’s CTR solution – crisis response — provides two outside consultants to insureds, with one specializing in “hard” security services like guards or instances of cyber extortion, and another focusing on crisis communications.
Without these outside services, there is only so much insurance can do in the aftermath of a crisis. Experienced consultants provide a range of security preparedness and response services to complement coverage and help insureds recover from an episode of violence or cyber event.
“From a communications perspective, our consultants can manage the public relations front to create clear and consistent messaging, but they can also stay in touch with families after a terror or other violent attack to make sure everyone stays informed,” Gibbs said.
They also serve as a first point of contact for insureds immediately after an event. If they need guidance quickly, consultants await at the ready.
“When a client purchases the product, they get a 24-hour hotline set up with one of our consultancies,” he said. “They can report an incident at any time, and our consultant will help either resolve a situation or deal with the aftermath in whatever way they can.”
While the Cyber and Terror Response package provides a comprehensive solution tailored for mid-size companies, Starr also offers standalone cyber liability and crisis management coverage on a primary and excess basis.
“For companies with greater exposure to a particular type of risk, or who simply want higher limits or greater customization, we have those standalone polices.” Landaverde said.
For more information on Starr Companies’ Cyber and Terror Response solution, visit https://www.starrcompanies.com/Insurance/CyberAndTerrorResponse.
Starr Companies is the worldwide marketing name for the operating insurance and travel assistance companies and subsidiaries of Starr International Company, Inc. and for the investment business of C. V. Starr & Co., Inc. and its subsidiaries.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Starr Companies. The editorial staff of Risk & Insurance had no role in its preparation.