What You Need To Know About OD Claims

John Frizalone
Senior Advisor,
American Global, LLC
John.Frizalone@americanglobal.com

To begin, New York Workers’ Compensation recognizes two main types of claims: accidents and occupational diseases (“OD”). A compensable (payable) injury must “arise out of and in the course of employment”. Under New York State law, there is a presumption that a claim for compensation and in the absence of substantial evidence to the contrary, is compensable and falls within Workers’ Compensation. This can be found in New York Workers’ Compensation Law (WCL)-§21(1). However, the claimant is still not relieved of the burden of showing that an injury was sustained in the course and arose from his/her employment. It is this presumption that is most often a point of contention for many employers.

Therefore, in reviewing the references to OD found in history, we cannot help noticing that the medical concept of OD evolved due to observations made on the basis of certain diseases being contracted by workers in certain occupations.

In its most elementary definition and truncated here, stated as “a disease of occupation by stating that it be limited to the injurious effects that are a direct, characteristic and indisputable related to an occupation”. In 1910, New York created a Workers’ Compensation law that, after a series of court challenges, was signed into law becoming effective in January 1914. However, coverage was limited to “accidental personal injury…”. In its definition of “injury”, this law included the term “such disease or infection as may naturally…result from such injury…”. For the most part compensation centered around the “traditional industrial accident”.

The debate to include or not include occupational diseases as a component of Workers’ Compensation lasted over 20 years, with an array of legislators for and against. Finally, Governor Herbert Lehman signed legislation in March 1935. Claims of a varying nature and cause made their way through the court system, finally settling in a place where it can be said that OD in New York is substantially different from law of accidental injury. It would appear that a controlling element is the disease must not only be related to the employment but to the particular type of employment.

Having a little bit of the background, let us take a look at where we are today.

WCL §2(15) defines OD. After over a century of legislation and court cases too numerous to count occupational disease is defined as “a disease resulting from the nature of employment and contracted therein”. It is further noted that the disease must result from a distinctive feature of the occupation and as a critical component of compensability, “a recognizable link…through competent medical evidence”.

We are more familiar with employee claims presented for OD involving exposure to toxins such as asbestosis, long recognized as an occupational disease. A particular bane for the construction industry is the occupational disease that arises from repetitive work duties. Occupations that require strenuous physical exertion, heavy lifting or repetitive motion, can also be found in the category of occupational disease. The Workers’ Compensation Board (WCB) and the Third Judicial Department has, for the most part, held this to be allowable via caselaw. The Law Judge, after review of medical evidence, determine the date the claimant contracted the disease. This “contracted” date is a most important date in the journey of any occupational disease claim. It should not be taken lightly that the burden is on the claimant to present medical evidence establishing the occupational links, both medically and historically.

Now let us take a quick look at how our employer and its Workers’ Compensation carrier become responsible for the medical, wage loss, and ultimate settlement of the claim. In no way meant to oversimplify an employer’s responsibility for occupational disease; it is stated in WCL §44, in part, “the total compensation due shall be recoverable from the employer who last employed the employee in the employment to the nature of which the disease was due and in which it was contracted”. Again, this is an oversimplification.

It would be remiss to conclude the discussion at this point if we did not include a note on “apportionment”. It is in apportionment where the “contracted” date becomes important. Once established, which can take time, evidence and WCB hearings, the Law Judge will apportion liability amongst the employers that the employee worked for subsequent to the date of contract. Apportionment is settled on a pro rata basis dependent on the time the employee worked for each employer. This of course presumes there was more than one employer and that it can be documented. It therefore benefits all employers to keep accurate records of their employee’s other employers. While there are time limits for employees to report occupational disease claims, the time frames are fairly liberal and often catch the last employer off guard. As a way of placing OD claims in perspective, The US Bureau of Labor Statistics reports that each year there are approximately three million nonfatal occupational illnesses and diseases. This represents about 5.2% of all workplace incidents. While this number is statistically low, these claims tend to be costly and remain open for longer periods of time, thereby creating a burden on employer’s experience mods and loss ratios.

It goes without saying that Occupational Disease claims have an exceedingly long tail. An essential part of the claims management process is maintaining records for current and past employees. Be inclusive of all prior employers, not just contractors, including periods of unemployment, self-employment, or as an independent contractor. Relying on union records may be helpful, yet often not sufficient. It is always best for employers to be able to present evidence of an employee’s prior employment. You do not want to be the last employer in a costly claim for an employee who, after 20-30 years of working, worked for you for a mere few months.

The construction industry is riddled with Wrap-Up jobs. Retaining these records is challenging and can be an effective way of keeping the claim from reaching your primary Workers’ Compensation carrier. Again, do not rely on others for protection. Maintain records of employees assigned and the insurance coverage provided. The same holds true for joint ventures and any job-sharing agreements made with other contractors. The burden for getting the claim apportioned is yours!

Finally, stay involved, and cooperate with your broker and the carrier, and be guided by the advice of your claims experts. You need an advocate, and they will need your assistance and documents to prevail.