Issues of compensability are factually driven and require attention to detail by members of the claim management team. This is extremely important in cases where the claim comes down to whether the injury was in the “course and scope of” employment. The correct decision can only be made when the individual claim handler has a good understanding of the law and knows how to apply it to the facts.
Case Study: The Workplace Fall
Frank Rizzo is a day laborer for Acme Construction Company and dresses for success by wearing his steel-toed work boots and favorite blue jeans. Given his hard work, he is invited to a corporate meeting and was told to “dress like a boring c-Suite professional.” Frank is excited and goes out and purchases a $1,000 suit and wing-tipped dress shoes. While the shoes make his feet uncomfortable, he attends the meeting. The meeting was exciting, and he is looking forward to prime rib for lunch. While walking down a hallway to the banquet room, his right knee buckles and now needs a total knee replacement.
Personal injuries “arising out of and in the course and scope of” employment is generally compensable under workers’ compensation laws. Frank was on the clock at the time of the meeting, but the question remains as to whether the “course and scope of” element has been satisfied. The hallway Frank was walking on did not have any slippery surfaces and was free of imperfections.
Is the injury compensable? These are questions claim handlers must answer daily.
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“The 6-Step Process To Determine Workers’ Comp Injury Causation”
Questions of “Risk” and “Position”
Courts across the country answer questions of “course and scope of” on a regular basis. The result is a maze of tests interested stakeholders must confront to evaluate a claim and whether to accept it:
- Increased Risk Test: Under this test, courts will examine whether the employment creates a “special hazard” that gives rise to the work injury. If this is the case, there is a necessary causal relationship between employment and work injury. Common examples of this include instances where something is located in the workplace that increases the risk of injury. Idiopathic injuries (those that are unknown or without explanation) are typically found not to be compensable and are denied.
- Positional Risk Test: This test examines whether the employer placed the employee in a location or “position” that gave rise to the work injury. Under this rather low threshold, just being at work and sustaining an injury can give rise to a claim being compensable.
Applying the Standards – Differing Results
The application of these two tests would likely give rise to different results in the scenarios outlined above.
- Increased Risk: The injury likely would not be compensable. Although the employee was asked to wear clothing and footwear he normally did not wear, nothing in the workplace exposed Frank to a heightened risk of injury. The defect-free surface would be an important factor. There is also no explanation as to why his knee gave out.
- Positional Risk: Frank was required to be at the meeting. It is also important to note he was specifically asked to dress in a certain manner, and testimony at hearing that his new shoes were uncomfortable are important. Although the walking surface was defect-free, his presence in the workplace gave rise to the injury. A court applying this test would find it compensable.
Based on the divergent results, members of the claim management team should understand the importance of how to evaluate the risk.
Investigating Troublesome “Course and Scope of” Claims
Members of the claim management team need to peel back the layers when investigating matters like Frank’s claims. This should include the following areas:
- Knowledge of the applicable legal standard – “positional” or “increased” risk;
- Obtain a detailed statement from the employee and possible witnesses. Is there an explanation for why or how the injury occurred? This is key;
- Determine the type of surface involved in the injury and its condition at the time the incident occurred. Documentary evidence such as photographs and security video should be preserved; and
- Instructions on workplace attire such as footwear, etc.
Conclusions
Claim handlers are called upon to make daily decisions on whether to accept a claim and commence the payment of workers’ compensation benefits. Not making the correct decisions can lead to increased costs on claims. This includes money spent on litigation costs, sanctions/penalties and setting incorrect reserves.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center.
Contact: [email protected].
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
