Wrongful denial of Workers Compensation Claims

Workers compensation insurance companies are duty bound to investigate, evaluate each any every claim fairly, and to promptly accept legitimate claims and begin providing the benefits including medical care and wage loss.

In 1985, the Colorado Supreme Court decided that workers comp insurance companies can be held liable in civil court upon proof of two things:

  • Delay in the processing of, or denial of, a valid claim; and
  • The insurer’s conduct is unreasonable and the insurer knows that the conduct is unreasonable or recklessly disregards the fact that the conduct is unreasonable.

Whether an insurance company has engaged in bad faith conduct is measured against insurance industry standards.

However, substandard insurance industry practices are common place in Colorado workers compensation claims. The types of substandard insurance industry practices we frequently see include:

  • First denying the claim and then hiring biased experts to support the denial;
  • Repeatedly using the same biased experts to deny or devalue claims;
  • Withholding or delaying medical benefits despite the well documented need for care and treatment;
  • Refusing to reconsider the denial of care after the injured worker or his doctor provide additional proof supporting the reasonableness and necessity of treatment;
  • Failing to make or stopping benefit payments with no valid reason;
  • Withholding wage benefits, to the point that injured worker is financially stressed, pawning personal possessions, losing his home and is subject to collections;
  • Filing appeals with no likelihood of success in order to delay and gain advantage;
  • Creating pressure on the injured worker by delaying and denying benefits, and then making low-ball settlement offers;
  • Insisting on unreasonable settlement agreements – for example requiring an injured worker to give up all employment rights (including unemployment benefits) as part of the settlement, for as little as $100.

When these companies unfairly delay or deny benefits, they run the risk of having to pay the injured worker additional damages for bad faith delay of payment.

We strongly believe – and Colorado law supports us – that a work comp insurer must treat injured workers fairly, rather than simply focusing on profits and services to employers. If you have been victimized by a claim denial or serious delays, please call or email me at: jennifer@bissetlaw.com today.