Sometimes the silver lining found in the midst of a problem is a boon. Other times, it’s lightning waiting to strike. 

The payouts in workers’ compensation claims are on the rise with more and more reaching the ‘mega’ status of $3 million plus. While this represents a good turn in term of workers’ rights, it also provokes a reaction in the insurance industry. 

Higher premiums and longer legal battles negatively effect workers and the pursuit of justice. The following elaborates on some of the factors resulting in these higher payouts and what they mean to you. 

Aging Workforce

On the workers’ side, the rising age of the workforce contributes to larger payouts. Older workers are more prone to suffer debilitating injury and they take longer to recover.

The most common accidents in workplaces trend towards younger workers except for slip/falls. Injuries resulting in partial or complete loss of function are also more common in younger workers.

Given that they have less time to live, these costs are somewhat offset by factors including loss of earning potential and consequences to quality of life.

Aging workers also tend to make more money for a given company, which offsets costs of compensation insurance. 

Neurological Understanding

Many of the larger payouts since 2001 include issues of head and brain injuries.

These injuries have seen both increased payouts and increased frequency due largely to better understanding of the injuries.

A few blows to the head were once written off but now concussions are taken more seriously and long-term harm from even minor head trauma is better understood.

Increased Litigation Time

Some of the costs come from the amount of time it takes to litigate a workers’ compensation claim. As injuries that result in ongoing loss of function (such as brain injury) become more common, it takes longer to ascertain injury impact.

More experts are called in and insurance companies fight more vociferously to avoid becoming another ‘mega’ payout. 

These increases in litigation create some barriers to plaintiffs. The larger compensation payouts are, in some ways, meant to encourage companies to take steps to avoid accidents but that doesn’t always work out.

Higher Premiums

Finally, the insurance companies struggle to turn their massive profits in times of increased payouts and stock market instability. 

To recoup costs, they charge higher and higher premiums to companies. The companies hire fewer people to avoid paying for as many high premiums. The lack of a robust workforce leads to fewer hands doing more work.

The cycle continues until some mitigating and stabilizing forces tome into play through regulation or reversal of trends. 

Start a Dialog

As you can see, the rise in payouts in workers’ compensation claims comes at a price. Though more people are getting adequate compensation for their injuries, others are facing more problems to get their claims addressed. 

We’re here to help balance the scale.  Contact us to learn the steps you need to take in order to address your workplace injury. We’re here to help.