The Workers’ Compensation Insurance Rating Bureau of California recently released a report covering the losses incurred by California workers’ compensation insurance carriers in 2021. According to the report, total losses amounted to approximately $13.1 billion. In 2020, losses incurred by workers’ compensation companies in California amounted to only $12 billion.
The report indicates that insurance carriers paid about $4.4 billion to cover medical losses of claimants in 2021. This accounts for 53% of all loss payments made by workers’ compensation insurers in the state last year.
Payments of indemnity benefits followed relatively closely. They amounted to $3.8 billion, or 47% of all loss payments. Temporary disability benefits payments accounted for approximately 54% of indemnity payments in general. Permanent disability benefits payments represented 35% of payments.
Various factors may account for the increase in losses incurred by California workers’ compensation insurance carriers in 2021 when compared to 2020. Although at least some payments made in 2020 may have been associated with claims initially filed in 2019 or earlier years, it’s possible that fewer claims were filed in 2020 because the pandemic resulted in fewer employees working in environments where they might be more likely to be harmed in accidents. As employees return to work, it makes sense that workers’ compensation claims would increase.
Although there is no confirmation that this contributed to the rise in losses incurred by insurance carriers, it is also possible that exposure to Covid-19 in the workplace also triggered an increase in workers’ compensation claims.
Those who own insurance companies and work in the industry may not necessarily be pleased with the findings of the Workers’ Compensation Insurance Rating Bureau of California’s report. This is natural.
However, the average worker in California may have reason to be happy with these findings.
California’s Labor Code is designed to protect the rights of workers. One way it achieves this goal is by legally requiring most employers in the state to purchase workers’ compensation insurance. Through workers’ compensation insurance, an employee can file for benefits to help cover such losses as medical bills if they are ever injured in an on-the-job accident or if they ever develop an illness as a result of the nature of their work.
Unfortunately, history has routinely shown us that insurance companies are less likely to prioritize the needs of injured workers than they are to prioritize their own financial interests. When employees in California file claims to recover workers’ compensation benefits, it is often the case that insurance carriers will attempt to deny their claims outright.
This is not always possible to do. Still, if an insurer cannot entirely deny a claim, they might nevertheless strive to convince a claimant to settle for less than they deserve.
The fact that workers’ compensation insurance carriers in California are incurring greater losses than they have in recent years indicates claimants may be receiving proper compensation more often. This is an undeniably positive trend for employees (assuming the trend does not indicate an increase in the rate of workplace accidents).
At the Law Offices of Kropach & Kropach, our Los Angeles workers’ compensation attorneys strongly believe it is vital that injured workers be properly compensated for their losses. If you believe you have reason to file a workers’ compensation claim, learn more about what we can do for you by contacting us online or calling us at 818-609-7005 to schedule a consultation.
