Are Contractors Actually Fully Insured?

Are Contractors Actually Fully Insured?

Anyone who has inquired with, or hired, a contractor or homebuilder has invariably seen or been told by the company that they are “fully insured.”  More times than not, this statement simply means that the company has a standard commercial general liability (CGL) policy. Unfortunately, these “fully insured” statements understandably give the customer a false sense of security that if anything goes wrong with the work performed by the contractor or builder, its insurance company will cover the damage and make things right. In fact, with a standard CGL policy, the opposite is true:  the insurance company will not cover damage that arises out of the company’s work (or its contactor or subcontractor). What is often referred to as the “your work,” “business risk” or “exclusion” directs to an exclusion in standard CGL policies that bar coverage for property damage to the part of the real property that the company is performing work on. The language often looks like this in CGL policies:

This insurance does not apply to:

  1. Damage to Property

Property damage to:

…. (5) That particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operations.

Practically speaking, this exclusion bars insurance coverage for damages such as deficient or defective work performed by the company or damage to your property caused by the company’s work. The net effect of no insurance coverage means that any recovery by the aggrieved customer will have to come against the company itself, which, depending on the company’s financial status, can be exceedingly difficult. Not only are many contractor and building companies set up as legal entities designed to protect against liability, but Wisconsin law exempts up to $15,000 in business assets from execution of a judgment. See Wis. Stat. § 815.18(3)(b).

In summary, it is incredibly important to vet the contractor or building company prior to hiring. In addition to their reputation and longevity in the community, you can inquire whether they have any insurance coverage or bond above a standard CGL policy and whether they have the financial resources to pay a judgement if a dispute arises. Moreover, the Wisconsin Circuit Court Access search (https://wcca.wicourts.gov/)  allows you to look up a company and see if they have unpaid judgments entered against them. This due diligence is necessary because a contractor’s claim of “fully insured” means little to nothing when the contractor’s work is the subject of the claim.

 

Hospital Liens: A Threat to Your Personal Injury Case

Hospital Liens: A Threat to Your Personal Injury Case

If you have health insurance, Medicaid or Medicare and you go to a hospital in your insurer’s network for treatment, the hospital is required to submit the treatment bills to your health insurer, Medicaid or Medicare.  You may have to pay a deductible, co-pay or co-insurance percentage, but the hospital does not send you a bill for the entire charged amount.  This holds true, unless that hospital’s treatment is for personal injuries caused by another person’s negligence, such as a car crash.

It is often surprising and dismaying to injury victims – who have paid premiums to auto insurance for medical payments coverage and for health insurance – that shortly after discharge from the hospital they get notice of a lien for a huge dollar amount.  Welcome to the little-known Hospital Lien statute, Wis. Stat. § 779.80:

(1)  Every corporation, association or other organization operating as a charitable institution and maintaining a hospital in this state shall have a lien for services rendered, by way of treatment, care or maintenance, to any person who has sustained personal injuries as a result of the negligence, wrongful act or any tort of any other person.

(2) Such lien shall attach to any and all rights of action, suits, claims, demands and upon any judgment, award or determination, and upon the proceeds of any settlement which such injured person, or legal representatives might have against any such other person for damages on account of such injuries, for the amount of the reasonable and necessary charges of such hospital.

Hospital liens create significant complications for an injury victim’s case.  First, the lien is for 100% of the total charged amount of the treatment; there are no contracted discounts that you often see with health insurance, Medicaid and Medicare.  Second, since the hospital is not an insurance company, the lien is not subject to Wisconsin’s Made Whole or Common Fund doctrines, both of which serve to reduce the amount paid back to health insurers out of an injury settlement or judgment.  Third, it does not matter if you have health insurance, Medicaid, or Medicare that would pay for the treatment; the hospital can bypass them and still put a lien on your personal injury settlement or judgment.

Because hospital liens can potentially eat up a significant amount, if not all, of a personal injury settlement, it is crucial that injury victims get an attorney as soon as possible.  For a hospital lien to be effective, there are several statutory and notice requirements that the hospital must comply with within certain time limits; an attorney can evaluate whether all these requirements have been properly complied with.  Also, an attorney can communicate with the hospital about the possible limitations for settlement or judgment and reach agreement with the hospital for a dollar amount less than the lien amount, or convince them that, based on the limited funds available, the hospital is better off submitting the bills to health insurance, Medicaid or Medicare.

Hospital liens serve as another reminder of why it is so important to obtain a competent attorney after an injury.  If you or someone you know has been injured and are facing a hospital lien, feel free to contact one of our personal injury attorneys at Anderson O’Brien, LLP.

 

Returning to Work After a Work Comp Injury

Returning to Work After a Work Comp Injury

Absent the lucky few, most Wisconsin workers are considered “at-will” employees. This means absent exceptions for unlawful discrimination (e.g. race, gender, age, religion, etc.), a worker can be fired for any reason, or no reason at all.  However, worker’s compensation injuries are another exception to this “at-will” presumption that makes a work injury a protected category.

Under Wisconsin’s workers’ compensation law, Wis. Stat. § 102.35(3), an employer (at time of injury) who terminates, or unreasonably refuses to rehire, an employee after a work injury is subject to a penalty of up to one year’s lost wages. The purpose behind this law is to dissuade discrimination against employees who have been injured on the job and, assuming there is work available within the worker’s restrictions, make sure the injured worker gets back to work with his former employer. This is yet another outgrowth of the bargain struck between workers and employers under Wisconsin’s worker’s compensation regime:  workers do not get to sue their employers or co-workers for injuries, but they are entitled to a system of no-fault benefits and job protections.

When returning to work, there is a distinction between returning while still healing with temporary physical restrictions versus returning to work with permanent physical restrictions. An employee must provide notice to their employer of any temporary (as well as permanent) restrictions. If the employer can provide work within the temporary restrictions at the same rate of pay, no temporary disability is owed; if the employer can only provide work at lower wages or less hours, the worker is owed temporary partial disability; and, if the employer cannot provide any work, the employee is owed temporary total disability. If an employer terminates a worker while they are still healing, the worker has an unreasonable refusal to rehire claim.

When an injured worker reaches an end of healing or “healing plateau,” the treating physician may assign permanent physical restrictions along with any permanent disability percentage. If the worker is provided permanent work restrictions, they must provide the same to their employer. Under Wis. Stat. § 102.35(3), the employer must offer “suitable employment…within the employee’s physical and mental limitations.” If the worker’s permanent restrictions allow return to their same job at the time of injury, they should be offered it. However, the employer must offer any suitable position available even if different than the position the worker had at the time of the injury. Only when there is truly no work available within the worker’s restrictions can the employer refuse to rehire the injured worker. The employer, not the employee, bears the burden of proving the lack of suitable employment.

The above is not meant to suggest that there is an absolute unassailable right to return to work for the same employer following a work injury. When determining whether there is “suitable employment,” the statute allows for consideration of “the continuance in business of the employer.” This gives rise to the employer’s argument that the nature of business or economic situation dictated its refusal to rehire the injured worker, not the work injury.

Unsurprisingly, these are highly fact-dependent issues and claims. Moreover, unreasonable refusal to rehire penalties are paid by the employer, not the work comp insurance company, which means they are hotly contested and litigated. The above is only a brief snapshot and is not meant to cover all the variations that accompany return-to-work decisions after a work injury; if you have questions, do not hesitate to reach out to one of our worker’s compensation or employment law attorneys.

 

The “Right to Be Heard” in Wisconsin Criminal Proceedings and the Impact on Your Car Crash Case

The “Right to Be Heard” in Wisconsin Criminal Proceedings and the Impact on Your Car Crash Case

Those who have the terrible misfortune of being injured in a car wreck involving a drunk driver or a hit and run driver, often find themselves having to navigate the criminal justice system as well as the civil justice system. Since the former almost always takes place before the latter, accident victims face potential pitfalls by giving an early statement to the at-fault insurance company.

Any attorney will tell an accident victim not to speak with the at-fault insurance company after an accident for a myriad of reasons. These reasons include:
1. The conversation will be recorded.
2. It is always very soon after the crash before any investigation is complete or the victim has seen the crash report.
3. The victim does not yet know the full extent of their injuries or prognosis.
4. The victim does not have a lawyer present to assist them.
All these reasons also apply to a criminal court proceeding that may follow an accident.

Last spring, Wisconsin voters passed an amendment to Wisconsin’s constitution expanding crime victims’ rights, commonly referred to as “Marsy’s Law.” While the amendment included numerous provisions, one provision included the right “to be heard in any proceeding during which a right of the victim is implicated, including release, plea, sentencing, disposition, parole, revocation, expungement, or pardon.”

This amendment expanded victim involvement and statements to earlier phases of the criminal proceeding. Judges are specifically asking at early stage hearings, such as bond hearings or initial appearances, if there are any victims present who want to provide statements. These hearings take place soon after the accident and often before the victim has retained counsel for the case. The accident victim, justifiably, is angered that they have been injured and want the judge to know. However, the circumstances of these early statements give rise to many of the same concerns that attorneys have with accident victims talking to the at-fault insurance company soon after the accident.

First, the statements are being recorded by the court reporter, and while not under oath, there is an implied solemnity to statements made to the Court. Second, the victim has likely not seen the crash report or does not know the results of the investigation of the crash. Just like a statement to the insurance company a few days after the crash, no one wants to be locked into what happened with incomplete facts. Third, at this early juncture, the victim will have just started to treat for their injuries and will not know the full extent or diagnosis. What is a neck strain at the ER following an x-ray may turn out to be a disc protrusion needing surgery once an MRI is performed a month later.

In a civil accident case, the insurance company will likely learn about any statements the victim has made to the Court, obtain the transcripts, and use them to impeach and discredit. None of this will be because anyone was dishonest; instead, they simply did not yet have the full picture of the crash and injuries. Just as a recorded statement taken mere days after the crash can be a goldmine for the insurance company, a court transcript recorded mere days after the crash can provide the same.

Importantly, this is not a suggestion that accident and crime victims avoid invoking their right to be heard at criminal proceedings. Rather, this is another illustration of why it is important to get counsel involved soon after a crash so they can help navigate both the civil and criminal justice system and make sure justice is obtained in both. 

 

When $100,000 is not $100,000 – Understanding Underinsured Motorist Limits in Wisconsin

When $100,000 is not $100,000 – Understanding Underinsured Motorist Limits in Wisconsin

Any regular reader of our newsletter, or attendee of our seminars, has heard the repeated importance about having enough underinsured motorist coverage (UIM) to protect yourself if you’re injured in an auto collision.  UIM coverage provides a pot of money to compensate you for injuries sustained in a crash if the at-fault driver does not have enough insurance to fully compensate you for your injuries.  In other words, once the at‑fault liability insurer pays its policy limit, your own insurance company steps into their shoes with its underinsured motorist coverage to pay you for any remaining uncompensated damages.

Unlike liability coverage or uninsured motorist coverage, a Wisconsin driver is not required by law to have underinsured motorist coverage.  However, if accepted (and you should), the lowest limit that can be provided is $50,000 per person / $100,000 per accident.  Considering the extremely low cost of UIM coverage, we strongly encourage that drivers get as high of limits as possible.  For example, my personal auto policy has $500,000 per person UIM coverage and it costs $26 per year.  Having sufficient UIM coverage is especially important in light of the fact that whatever your UIM policy limit, whether it is $50,000 or $500,000, is a dollar amount that you will never be able to recover the amount from your insurance company.

Current Wisconsin law allows insurers to define underinsured motorist by a “limits to limits” comparison.  The result is you will only be eligible for UIM coverage if your UIM policy limit is greater than the at-fault liability policy limit.  Similarly, current Wisconsin law allows insurers to reduce what it has to pay under its UIM coverage by whatever is recovered from the at-fault driver and his or her insurance company, often called a “reducing clause.”  This combination means no Wisconsin driver can actually recover the dollar amount of the UIM he or she purchased.

Hopefully, an example will help.  Joe is severely injured in a car wreck.  The at-fault driver has a $100,000 liability policy limit that the insurance company pays out to Joe.  This payment from the liability insurer does not fully compensate Joe for his injuries, and he turns to his own insurance company, with whom he has a $100,000 UIM policy.  Unfortunately, because both the liability insurance and UIM insurance have the same limit, $100,000, it means that there isn’t actually any underinsured motorist coverage available to Joe.  Because of the limits to limits comparison, only when the UIM policy limit is higher than the liability policy limit would Joe’s UIM coverage kick in.

To illustrate the reducing clause, lets change the above example to say that Joe has $250,000 in UIM coverage.  The at-fault insurance company still pays its $100,000 to Joe.  Now, because the $250,000 UIM limit is higher than the $100,000 liability limit, Joe is entitled to UIM coverage under his policy.  However, he is not entitled to $250,000 in UIM; instead he is only entitled to $150,000 because of the reducing clause ($250,000 – $100,000 = $150,000).

Regardless of what your policy says the UIM limit is, by virtue of the limits to limits comparison definition of underinsured motorist and reducing clauses, no Wisconsin driver actually knows how much UIM he or she will have available until after the accident and after he or she knows how much liability insurance the at-fault driver has.  As such, when you hear me or my colleagues harping about having plenty of UIM coverage, it is because if you have low limits of UIM, there is a good chance you will never get to use it, and if you do end up using it, it will always be less than the dollar amount you purchased.

 

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