"Mega" workers' compensation claims from the construction sector covered about 40% of major claims from 2001 to 2017, but still accounted for 20% of claims, according to research released Tuesday by Workers & # 39; Compensation Insurance Rating Bureau of California.
Oakland, California-based credit rating agency analyzed comps claims exceeding $ 3 million in costs, and found that while such mega-claims are "relatively rare" compared to the more typical compensation claim, such claims are a "highly unpredictable component" of industry.
"With medical advances, improvement in mortality patterns, especially for those with serious injuries, increased incidence and costs of home care, and reform-related cost reductions in some states," the report suggests that the cost of these claims may increase.
Approximately 4,500 damages from the accident year 2001
Of these, 57% were between $ 3 million and $ 5 million, 33% between $ 5 million and $ 10 million, and 10% more than $ 10 million, according to WCIRB.
The report also found that the degree of reported mega-claims fell sharply during the Great Recession when employment fell in most of the country. Since 2013, the proportion of mega claims has increased steadily with the estimated accident year 2017. Mega claims are counted as a 12-year maximum.
Other highlights in the report include:
- Mega claims arising from brain damage and head injuries account for 17% of mega claims between $ 3 million and $ 5 million, but 30% of claims in excess of $ 10 million. These claims account for well under 5% of all claims in most states.
- Motor vehicle accidents give rise to more than 20% of mega claims, but 5% or less of all claims in most states.
- Requirements often take some time to break the $ 3 million threshold. Less than half of mega-claims reach the $ 3 million threshold with 18 months from the start of the policy, and less than 90% reach that threshold with 126 months from the start of the policy. However, mega-claims generally reach the $ 3 million threshold faster than before.
- Mega receivables arising from the construction sector reach the $ 3 million threshold faster than those arising from the office and office sector. Similarly, mega-claims due to motor vehicle accidents, "object-hit" injuries and head and brain injuries reach that threshold faster than other mega-claims. However, mega-claims involving burdens and pollution damage reach the $ 3 million slower threshold.