Insurance Companies and their Duty to Investigate in Workers’ Compensation Cases

With respect to my Workers’ Compensation Claim, Does the Insurance Company handling my Claim have a duty to treat me fairly?

Yes. California law requires that Injured Workers be treated fairly. Regulation Section 10109 section (e) provides that “Insurers, self-insured employers and third-party administrators shall deal fairly and in good faith with all claimants” Not only does this section apply to the injured worker, it also applies to any dependent’s claims as well. Dependent’s claims may arise upon the injured worker’s death. In those circumstances, there can either be a death claim or an accrued benefits claim on a “live” claim. In other terms, any outstanding unpaid benefits owed up to the date of death.

insurance company duty to investigate workers comp claim

Does fair treatment include a legitimate investigation of my claim?
If so, how?

Yes. Regulation 10109(a) provides that “[t]o comply with the time requirements of the Labor Code and the Administrative Director’s regulations, a claims administrator must conduct a reasonable and timely investigation upon receiving notice or knowledge of an injury or claim for a workers’ compensation benefit.” With respect to acceptance of the claim, Labor Code Section 5402(b) provides “[i]f liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division. The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 90-day period.” Therefore, Insurance Companies have an initial duty to investigate the claim within the first 90 days of their knowledge of the claim.

Besides the acceptance of the claim, Is there a duty to act fairly with respect to my entitlement to benefits?

Yes. Regulation Section 10109(b) requires “[a] reasonable investigation must attempt to obtain the information needed to determine and timely provide each benefit, if any, which may be due the employee.” It is noted under (b) (1) that “[t]he administrator may not restrict its investigation to preparing objections or defenses to a claim, but must fully and fairly gather the pertinent information, whether that information requires or excuses benefit payment. The investigation must supply the information needed to provide timely benefits and to document for audit the administrator’s basis for its claims decisions. The claimant’s burden of proof before the Appeal Board does not excuse the administrator’s duty to investigate the claim.

If an investigation reveals that additional benefits are due to me,
Does the Insurance Company have an obligation to do anything?

Yes. Labor Code Section 10109(b)(2) provides that “[t]he claims administrator may not restrict its investigation to the specific benefit claimed if the nature of the claim suggests that other benefits might also be due.

”Therefore, if an Insurance Company finds that additional benefits are due to the Injured Worker, they are obligated to further investigate and pay the benefits if indicated.

If new information is received that supports my claim and/or claim for benefits, does the Insurance Carrier have an obligation to address that information?

Yes. Regulation Section 10109(c) provides that “[t]he duty to investigate requires further investigation if the claims administrator receives later information, not covered in an earlier investigation, which might affect benefits due.” Therefore, if new witnesses come forward, medical records are received, or a medical opinion is obtained supporting an Injured Worker’s claim form benefits, the Insurance Company is required to re-visit and reanalyze the entitlement to benefits.

Does the Insurance Company have to document my claims file concerning their efforts to investigate my claim?

Yes. Regulation Section 10109(d) provides that “[t]he claims administrator must document in its claim file the investigatory acts undertaken and the information obtained as a result of the investigation. This documentation shall be retained in the claim file and available for audit review.” This section requires documentation so that outside bodies can investigate whether the file was handled properly.

If I believe that that Insurance Company has not dealt with me fairly,
What can I do?

You can request that the Department of Industrial Relations audit your file. Your claim’s file should reveal the documented steps and efforts that the Insurance Company undertook to handle your case in good faith. If the DIR finds that your file was not handled properly, they may impose fines upon the Insurance Company.

With more than 23 years of expertise in defending workers’ rights, the Law Offices of Edward J. Singer, A Professional Law Corporation, is here to assist. If you have any questions concerning your rights, please do not hesitate to contact our offices. Please contact us today concerning any workers’ compensation questions or issues.