COVID-19 Could Save The Insurance Industry Billions

When the COVID-19 pandemic started, insurance industry pundits were quick to speculate that there would be a massive increase in workers’ compensation claims. So far, those predictions turned out to be overblown.

What isn’t speculative is that the insurance industry is poised to take advantage of the worldwide pandemic by reducing the compensation an injured worker is entitled to on non-COVID-19 claims by the aggressive use of California’s apportionment law.

In 2004, Governor Schwarzenegger radically changed apportionment law by permitting a reduction of the workers’ permanent disability award due to non-work related conditions – even if a disease was never disabling.

Insurance industry insiders are already talking about using Schwarzenegger’s law to blame COVID-19 exposure as an excuse to reduce the value of all types of workers’ compensation claims made in the future.

Here’s an example of how the insurance industry would take advantage of the worldwide pandemic:

1) Suppose years from now, an injured worker claims lung, heart, and kidney damage due to cumulative exposure to smoke and chemicals at the workplace.

2) The insurance company claims that a COVID-19 infection can cause lasting damage to the lungs, brain, kidney, heart, and vascular systems.

3) Scientists explain that the immune system makes antibodies following a COVID-19 infection, which leaves behind “a record” of the disease. This appears to be true whether or not the person suffered any symptoms of the disease.

4) The insurance company will then use the record of COVID-19 exposure from years ago to seek a reduction in the permanent disability award, even though the disease itself never caused any disability. The apportionment will reduce the compensation owed to the injured worker, and thus the insurance company escapes the responsibility to pay for all of the disability the work injury caused.

The insurance industry will face COVID-19 work injury claims for a limited period of time because the pandemic will eventually subside.

However, the insurance industry’s effort to apportion away a worker’s permanent disability benefits due to COVID-19 will last as long as the worker lives.

Maybe the workers’ compensation insurance industry forgot to create blaring headlines about the potential billions of dollars it will save on this pandemic.

But I doubt it.