The Triangle Shirtwaist fire of 1911 was a seminal event in the creation of America's 20th century worker safety system. In the 21st century, the question is how will the attacks of the World Trade Center affect the workers' comp claims system?
A fire on March 25, 1911, at the Triangle Shirtwaist Co. in New York City killed 146 workers, yet the company's owners and insurers were able to walk away from a court case free of liability for safety violations and compensation to survivors and estates.
Spurred by that fire, rallying cries from worker advocacy groups and vocal demands from labor unions, lawmakers all over the United States imposed tougher safety codes and authorized the creation of state workers' compensation systems.
With the advent of these state-based disability insurance systems, the states helped define work injury and death benefits, and introduced from Europe a no-fault system of dispute resolution that has prevailed for nearly a century.
The state-based system of compensating injured workers, funded through payroll-based premiums, has provided a guarantee for workers' medical care and disability benefits. Despite this, the state-based compensation system suffers from cracks, say its critics.
One glaring lacuna, according to John Burton, the former chairman of a federal commission set up in the early '70s to study on the workers' comp system, is how disease claims are addressed.
Millions of work disease cases, asbestos claims for example, flooded trial courts after federal courts in the '70s found that "exclusive remedy" did not apply to cases of egregious negligence or fraud.
Since then, the states have not widened coverage provisions for disease claims. If anything, says Burton, it is more difficult today to file these claims than a generation ago.
But claims from the World Trade Center could test that notion, and perhaps even drag New York state's workers' comp system into crisis when thousands of diseased workers seek medical care and disability benefits.
Other states with laws similar to New York are open to similar risk.
In New York, like many states, workers suffering from work-acquired diseases are subject to tougher evidentiary standards than those applied to traumatic injuries such as to the knee or back.
Insurers in New York cover about half of all workers' comp claims, with the state-run insurance fund being the largest writer. Self-insured employers cover the other half. The total cost of workers' comp claims in New York has been running at about $3 billion annually.
This normal annual claims cost for the entire state system could be matched or exceeded by the total cost of claims, mostly disease in nature, arising out of World Trade Center rescue and recovery work.
The cost of these conditions, which will almost certainly run in the billions of dollars, includes regular workers' comp payments, negligence awards, federal grants and disability pensions.
The total costs may be picked up ultimately by the federal government based on a commitment President George W. Bush made on Sept., 13, 2001, to pay for recovery.
The Bush administration early on made a display of giving more money to medical testing and treatment. It also said it would pick up the costs of recovery workers' public disability pensions and liability lawsuits, as well as workers compensation premiums.
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October 1, 2007
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