Synopsis: INSURANCE ALERT—YOUR ILLINOIS OPERATIONS ARE ABOUT TO BE BARE/UNCOVERED FOR MAJOR RISK—READ THIS ARTICLE, CALL YOUR INSURANCE BROKER RIGHT NOW! Analysis by Bradley J. Smith, J.D. and Eugene F. Keefe, J.D.
Editor's Comment: We reported to our readers a few weeks ago the Illinois Legislature was considering IL Senate Bill 1596. Fast forward 14 days and here it is: that didn’t take long, did it! Both Houses in our ITLA-controlled legislature passed SB 1596. Now the bill only awaits Governor Pritzker’s rubber stamp of approval by signing it with no apparent foresight to its effects on Illinois’ already struggling economy. Jobs and business are departing and the pace is probably going to pick up. Our worry is you are certain to have a coverage gap due to the language of this bill—if/when it becomes law.
The only way to circumvent this tragedy is to telephone your insurance broker to get some type of possible future coverage for these types of claims. Hopefully, where there’s a market; there’s future affordable coverage on the horizon. The only other way to fix this will be to attack it on a particular factual circumstances lending itself to constitutional challenges. But remember, the People’s Republic of Illinois is a one-party state with no true method to rein in our lawmakers other than public opinion.
Is this what we should expect from the IL Legislature going forward?
Again, this is not a test. SB 1596 is here and will be signed into law. This unprecedented and unneeded legislation amends the IL Workers’ Compensation Act and the Workers’ Occupational Diseases Act to allow employees to directly sue their employers in uncapped civil proceedings for a “latent injury.” In effect, this shocking IL WC Act amendment subjects Illinois employers to unlimited liability in tort for their employees’ “latent injury” claims. It may also happen in a fashion that may render Illinois employers uninsured for potentially thousands of expensive and unpredictable claims. In Gene’s view, this legislation is being quietly driven by ITLA or the Illinois Trial Lawyers Ass’n who may make zillions in new fees while destroying jobs and the Illinois marketplace.
Yes, You Heard Us Right—There Will Be No Insurance for Billions of Dollars in Old and New Unprecedented IL Workplace Exposures
As veteran defense lawyers, we want our readers to know this legislation will unwittingly strip Illinois employers of any insurance coverage for these types of massive claims due to common CGL policy and workers’ compensation policy exclusions. And the only thing lying in the way of this bill is the newly minted Governor: in our view, it’s here and he’ll sign it soon with no care for the consequences.
Why does this matter to all of our readers in the insurance, claims, engineering, construction, manufacturing and other related industries? Well… this started in a claim denied by the IL Supreme Court in a case named Folta v. Ferro Engineering. ITLA is trying to reverse that outcome, now what they dominate our State legislature. When the Gov signs it, this legislation will effectively bankrupt your business quickly or over time. In our view, it makes absolutely no sense to push this legislative agenda in Illinois, unless the goal is removing all construction, engineering, manufacturing and other businesses from the State—we hope that cannot be the goal of Illinois Democrats. Foresight is like hindsight, but proper foresight in such matters in pushing individual legislative agendas against IL employers. That’s because ultimately there needs to be money to defend, manage and pay these types of claims. That money either comes in baskets from IL employers or from their insurance carriers. If the employer or their carriers go broke in paying likely expensive “latent injuries,” then there will be no money left for Claimants.
The Amendment Ignores and Strips Away the Logic of the Exclusive Remedy Provision of the Illinois Work Comp Act and the Workers OccDisease Act.
As currently written, these WC/OD Acts impose liability without fault upon employers and, in return, prohibit expensive and explosive common law suits by employees against their employers. The exclusive remedy provision was part of both Acts’ “grand bargain” of the sacrifices and gains of employees and employers. In effect, employers assumed no fault liability to their employees, while being relieved of the prospect of large and unpredictable damage verdicts.
Perhaps the Illinois legislature and the newly minted Governor believe that where there’s a will, there’s a way. In other words, they may believe insurance companies will adjust and provide endorsements for these types of claims. However, those types of endorsements will be enormously cost prohibitive—if insurance companies will even offer them. The reason is that such claims likely will result in severe injuries and deaths, especially in asbestos exposure (and ultimately the development of mesothelioma) or other similar types of “latent injuries.” Either way, call your broker and seek answers.
Additionally, these types of claims can be difficult to defend given the timing of them—they present symptoms and damages decades after exposures. And then there’s difficulty of locating the particular culprit that might have caused the disease or deleterious condition. Years and years of experts have developed theories, such as the “single exposure” theory. The theory means one single exposure to a “latent injury” pathogen or other mechanism can proximately cause the disease.
Make no mistake, these types of legislative exposures are an affront to keeping Illinois manufacturing, construction, health care and other types of major businesses in Illinois.
What’s a latent injury? ‘Latent’ is defined in Merriam-Webster’s as present and capable of emerging or developing but not now visible, obvious, active or symptomatic. Okay! It should be easy to determine what employers now face if this bill passes, right? Wrong! Some of the potential types of exposures and other injuries that are latent would be:
Electromagnetic Fields Antidepressant Drugs Ephedra and PPA;
Blood Products (HIV/Hepatitis) Diethylstilbestrom;
Muscoskelital (lower back pain);
Long term hearing loss from work noise-industrial deafness;
Lead paint exposure;
Acoustic shock; or
Repetitive trauma claims.
There are many other possibilities, but these are some of the major areas we would expect to be contemplated by the legislative acolytes at the Illinois Trial Lawyers Association.
SB 1596 amends the IL Workers’ Compensation Act and the Workers’ Occupational Diseases Act. It outlines that recovery do not apply to injuries or death resulting from an occupational disease as to which the recovery of compensation benefits under the Act would be precluded due to the operation of any period of repose or repose provision. It also provides that, as to any such injury or occupational disease, the employee, the employee's heirs, and any person having the standing under law to bring a civil action at law has the nonwaivable right to bring such an action in Circuit Court against any employer or employers.
If the latent injury discussion remained in the workers’ compensation arena, then perhaps this would not be as big of a deal. This is where this type of claim against employers should properly be. Nonetheless, that is not what this new legislation mandates. Instead, it’s another attempt by the Illinois Trial Lawyers Association to circumvent the IL Workers’ Compensation Act to keep having Plaintiff lawyers get richer and richer. Ultimately, this will not protect individuals, because the money will dry up quickly. And if there’s no way to pay claims, then there’s no money for injured persons that truly need it.
This type of legislation not only would force Illinois businesses out but would eventually kill those businesses by whatever prior connection they had to Illinois from decades past. This will likely lead to business dissolutions and/or bankruptcies.
Perhaps an alternative the legislature could debate would be extending the twenty-five-year repose period under the Acts. Because not being insured is not good for employees either. And when this legislation signed by the Governor, then say bye to insurance for latent injuries to employees. Instead, employers will come to find they have no coverage for a latent injury suit by an employee, which could potentially rise to the level of a wrongful death claim—meaning multi-million-dollar judgments. Ultimately, these bills do not even aid in injured workers viable recoveries, which completely defeats their purpose.
We’ll continue to apprise you of the progress of the implementation of this detrimental new law. Once this is signed, it will become effective immediately per the designation in the passed bill, unless an amendment occurs. This means the law as drafted may not even allow for time for an adjustment.
One thing you should immediately do is to contact your insurance brokers to seek out newly implemented insurance declarations to deal with these types of newly evolving claims. Currently, there is no insurance applicable to these types of claims and our readers could be sitting with potentially bankrupting latent injuries just waiting to arrive at your doorstep. The problem is a portion of these latent injuries will be left uninsured and that cannot be remedied by new insurance declarations. This is a problem that everyone will have to deal with.
The research and writing of this article was performed by Bradley J. Smith, J.D. and Eugene F. Keefe, J.D. Bradley can be reached with any questions regarding employment law and commercial general liability defense at firstname.lastname@example.org.
Synopsis: Michael B. Goldberg and Jim DeMunno Rest in Peace.
Editor’s comment: The world of Illinois Work Comp mourns the passing of two leading lights of this industry.
On behalf of the defense team at Keefe, Campbell, Biery & Associates, we regretfully advise of the passing of long-time WCLA member, Michael B. Goldberg. Michael passed peacefully in his sleep after a very long battle with pancreatic cancer. Michael was surrounded by his family at his home in Florida. Our sincere condolences go out to the Goldberg family. Michael B. Goldberg was a senior partner and founder of the law firm now known as Goldberg Weisman Cairo (GWC). Founded in 1977, GWC has grown into one of the largest personal Injury and worker’s compensation law firms in Illinois.
We also have to advise James “Jimmy” Francis DeMunno, 83, of Cary, passed away peacefully on St. Paddy’s Day, March 17, 2019. James was a proud veteran of United States Army, where he served during the Korean War. He graduated and earned his JD from DePaul University, College of Law. James was an attorney for 40 years and served as a State Appellate Court judge for 8 of those years. Most of all, he loved being with his family and attending his kids and grandkids sporting events.
In lieu of flowers, donations may be made to JourneyCare Foundation, 2050 Claire Ct., Glenview, IL 60025.