Construction can be dangerous work. The majority of injuries to workers and members of the public are relatively minor; the injured persons fully recover in short order. However, catastrophic injuries, while rare, can devastate a person’s life, cost enormous amounts of money, attract unwanted media attention, and harm a contractor’s reputation and business.
There is no single definition of catastrophic injury. Organizations may define it in dollar terms, such as an injury that incurs liability of $250,000 or more. Others may define it in terms of the injury’s severity – a broken arm might not be considered catastrophic, but a crushed or severed arm might be. Still others may define it in terms of a change in an individual’s earning capacity – an injury that prevents a person from working or reduces his wages for less than a year might not be considered catastrophic, but one that permanently reduces or eliminates earning capacity might be.
Whatever the definition, there are some things a contractor can do to effectively manage a claim. A few steps the contractor can take before an injury occurs may pay dividends later:
- Plan ahead. Most construction businesses are too small to have their own risk management departments, so form a partnership with an insurance agent experienced in insuring construction risks and obtain coverage from a company with expertise in handling construction claims.
- Form good relationships. Many companies that insure contractors are willing to have a meeting involving the customer, agent, loss control and claims staff. Take advantage of this and form good working relationships with the people who will respond to a severe claim. If the contractor uses a third party administrator for claim handling, meet in advance with the appropriate staff and get their contact information.
After a loss occurs, the company can do several things to manage the claim:
- Work with the agent, insurance company, and others to evaluate the claim and prepare possible legal defenses.
- In cases, where the contractor’s liability is clear, make quick contact with the claimant and the family. Work with the medical facilities to ensure that the claimant does not receive a bill.
- Be truthful with the claimant, family, investigating authorities, and the media.
- Begin the claim investigation as soon as possible to determine the facts and build a defense strategy.
- In cases where the contractor’s liability is unclear, identify possible legal defenses. These can include contributory negligence on the part of others, no negligence on the contractor’s part, intervening causes, product defects, and others. Use these defenses to get the contractor dismissed from the case.
Good communications are the keys to successfully managing a catastrophic injury case – with the claimant and family, medical providers, insurance adjusters, and other interested parties.
- Be prepared to answer the claimant’s questions or to find the answers. Frequent and meaningful communication with the claimant should assure him that the company cares about his situation. A claimant who feels that someone is paying attention to his needs is less likely to hire a lawyer.
- Working with medical providers will keep the contractor informed as to the claimant’s progress, expected therapies and treatments, and projected length of disability.
- Work with the insurance company and medical providers to minimize and resolve disputes.
- Stay involved with the insurance company’s handling of the claim. The company’s goals might not be the same as the contractor’s.
No contractor wants to see someone harmed because of construction operations. However, severe injuries can and do occur on job sites. With careful pre-planning, proactive involvement after the fact, and prudent claim management, a contractor can do the right thing by the claimant and protect his business at the same time.