Workers' compensation as we know it today—the insurance system that provides medical care and other benefits for workers who become sick or injured in the course of doing their jobs--grew out of the European labor movement in the late 19th century. It was one of the progressive reforms introduced by Germany’s Chancellor Otto von Bismarck in an attempt to diminish the appeal of the then-popular socialist parties. 

The U.S. proved more resistant to the idea, and early attempts to establish workers' compensation by the states faced challenges in the courts. At the time, workplace injuries in the U.S. were considered to be under tort law, and cases had to be tried in the court system, a time-consuming and costly procedure. Believe it or not, even some early American labor unions were resistant to the idea of state-administered workers' compensation, because they felt it would decrease their role as providers of worker benefits.

In Illinois, the turning point was the 1909 Cherry Mine Disaster, a coal-mine fire in which 259 men—many of them just boys, some as young as 11 years old—died. Outrage over the fire helped lead to the 1911 passage of the law that would develop into the Illinois Workmens' Compensation Act (workmens was subsequently changed to workers). 

What's Covered

Like other business entities, homeowners associations pay for workers’ compensation. It applies to all workers whether they are secretaries, management, maintenance people, doormen, supers or bookkeepers, and it affords quite complete coverage. Mark McLallen, president of Condominium Insurance Specialists of America in Elgin explains: “Most expenses incurred from an injury and while recuperating from an injury are covered by workers' comp, including emergency room visits, surgeries, follow-up exams, medication, physical therapy and travel. Loss of wages are typically addressed by taking a percentage (usually two-thirds) and applying it to the number of absent days until the employee is back performing original duties.”

In addition to physical injuries, diseases are also covered, as are some psychological conditions. According to Tyler Berberich, a workers' compensation attorney with Horwitz Horwitz & Associates in Chicago, “Any kind of work-related disease that emanates from an occupational hazard—chemicals, that kind of thing—would be covered under the Workers' Compensation and the Occupational Disease Act.” 

As for psychological issues, McLallen gives an example: “We insured a client whose manager was checking a unit and discovered a suicide. The employee was understandably distraught…The comp carrier not only paid for her brief time off, but for counseling as well. However, psychological injuries are not covered in all states, or by all carriers. Illinois case law has afforded coverage defined by an employee who suffers a sudden, severe emotional shock traceable to a definite time. This is not necessarily the case for all cases involving emotional distress without a physical injury.”

Permanent Disability

Workers' compensation also covers permanent inability to do your job. Karyl Dicker Foray, CIRMS, CRIS, a community association specialist with Rosenthal Brothers in Deerfield explains that “If someone is permanently injured, workers' comp can pay a final settlement, and also give you job retraining if you can't do the job that you have always done.” 

Berberich adds that “You get paid maintenance benefits, which are two-thirds of your average weekly wage while you're off work, and you can work with a vocational counselor at the employer's expense. If the new employment you find—or the new employment you're capable of performing within your restrictions—pays you less than your previous job, then you can get wage-differential benefits, which are two-thirds the difference between what you were making and what you're able to make now.” And these benefits continue at least for the rest of your working life. 

According to Berberich, “Benefits awarded for an injury that happened before September 1st of 2011 last the rest of your life. For an injury that happened after September 1, 2011, it is five years or to the age 67, whichever is longer.”

Gray Areas

Workers' comp covers most cases that you'll confront, but not every instance is cut-and-dried. There are gray areas, Foray says, “If somebody trips and falls, and breaks a leg, obviously it's covered. If someone hurts his back, that might be questionable, because you can't normally see physical proof of a back injury,” or prove beyond doubt that a back condition is the result of a work injury, she adds.

Injuries while traveling to and from work are usually not covered, but there are exceptions. For example, Berberich says, “If there's a specific way they have to come to work, like if an employee has to park in a certain parking spot or has to park in a certain part of the lot, and they had to go into a certain door in a building. And between that door and that part of the lot, there's an alley, and in the alley, there's some sort of dangerous condition, and they end up hurting themselves that can be a case.”

 Vendor & Board Coverage

Vendor coverage is something of a hidden benefit to workers' compensation. “Injuries to association employees,” McLallen says, “are the primary reason most board members and managers purchase these policies, but many dismiss the unexpected exposure that exists when vendors come on-site.” 

While it is always of paramount importance to make certain that vendors and contractors have the appropriate insurance coverages and contracts in place before they begin work, McLallen warns that “sometimes that coverage is impaired—usually from the vendor's coverage being canceled for non-payment. When a vendor employee is injured at the association and the vendor's coverage is compromised, the employee will sue the association, and seek employee status to obtain benefits. Having a workers' compensation policy will not only provide defense coverage for this type of incident, but also provide benefits if the association is deemed to be a de facto employer.”

Board coverage varies, says Foray. “Some insurance policies exclude board members, and some include them.”  It's a good idea to opt for inclusion, if at all possible. “We have a situation where a homeowner went crazy because his unit was foreclosed upon, and he went to a condo board meeting with a gun and shot and killed a board member.” Not only could the board member's heirs collect, given an inclusive policy, but Foray says other board members could too, on the grounds of the psychological trauma of witnessing such a horrific event. “I know that a lot of those people that were at the meeting had psychological injuries.”

In addition, says Foray, “Some policies have what's known as a voluntary-compensation endorsement, which includes coverage for volunteers working on behalf of the association. So if you have a clean-up day, and somebody gets injured while they're picking up the garbage around the entryway sign, that could be covered under workers' comp. It doesn't always have to involve someone on a payroll.”

Does It Matter Who's to Blame?

Workers’ compensation is similar to a no-fault auto-insurance policy. It eliminates the need to go through the court system in the great majority of cases. Employees get benefits regardless of who is at fault, and in most cases, employees cannot sue their employers or colleagues. Even if the fault for an injury lies with the injured person, the employer or a co-worker, workers' comp generally covers expenses and avoids lawsuits. According to McLallen, “Barring an intentional act to cause a self-inflicted injury, if an employee is on the job and becomes injured, it should be covered. In my experience, most comp claims are self-inflicted. While the specific act may have been ill-advised, fault really has no impact on the claim.”

Berberich expands on this point. “If the employee was doing something for the furtherance of their employment—even though it wasn't recommended, or might even be specifically forbidden in their handbook or something like that—if they're doing it as part of their job, and they're doing it because they believe that is the way they should do their job, or they're trying to do their job the best they can, and it's just been done in a negligent manner, it's still going to be a compensable case.

For instance, in one case I had a few years ago, there was a guy who was cutting ribbons of plastic off rain barrels as part of his job. And he was specifically told, 'You can't use your own knife, and you have to hold the barrel a certain way.' But he felt using his own knife and holding the barrel a different way made him work faster and get his job done better. So, of course, he ended up cutting himself. And that's still a compensable case, because the accident arose out of and in the course of his employment, and his injury was related to that accident.” 

What about the notion of an employee suing an employer or colleague directly? Berberich explains that “when the Workers' Compensation Act was enacted in the early 1900s, the legislature essentially said that for work-related injuries, you're trading your right to bring a common-law suit against your employer in exchange for having the Workers' Compensation Act, and the rights related to it. So the only time that there could be a common-law claim brought and a workers'-compensation claim brought is if there's a third party involved. Someone who is not their employer, or a co-worker who's been hired by the same employer. A third party from another company could negligently cause an injury.”

Starting the Process

After tending to the injured person if necessary, the first step in an on-the-job injury situation is to notify the insurance company. “For most carriers, a Form 45: Employer's First Report of Injury (iwcc.il.gov/ic45FORM.pdf) is all that is required,” explains McLallen. “This form includes questions specific to the incident, and will allow the carrier to begin addressing the claim with the employee. The vast majority of all claims are handled directly between the insurance company’s adjuster and the injured employee. There can be circumstances where attorneys become necessary to resolve differences of opinion, but this is certainly the exception,” he says.

Unions might become involved with matters that aren't covered by workers' comp, such as extra pay for vacation days that were not taken due to inability to work. But, Berberich says, “Unions are rarely involved with worker's compensation claim at all.”

Lingering  Costs

An association's insurance profile can definitely be affected by workers' compensation claims. According to McLallen, “Workers' comp, like most other insurance policies, is definitely affected by losses. Depending on the premium, some policies even contain a factor that affects the overall rate (credits for good experience, debits for large/multiple claims). Certainly having claims will affect future renewals.” 

And, “Every insurance company,” adds Foray, “files their rates with the state, so there's not a lot of deviation or negotiation on a workers'-comp policy.” That being said however, “Big claims might affect whether or not someone can or cannot get workers' comp from a regular company. And if you have a specific employee who gets injured every year like clockwork, then that will also tell the underwriters that there's a problem.”

If insurance companies won't cover your association, then you must turn to the government, says Foray. “The state has an assigned risk pool for groups that can't get coverage somewhere else for whatever reason, be it that your payroll isn't high enough, or your payroll is too high, you've had too many claims, you have repetitive claims, or multiple claims of the same type.” And the state pool costs more.

For additional information on workers' compensation, check the handbook available from the Illinois Workers' Compensation Commission on their website at http://www.iwcc.il.gov /handbook.htm. The site also has a list of classes, both in person and on the web at http://www.iwcc.il.gov/wc_ classes.pdf. 

Raanan Geberer is a freelance writer and a frequent contributor to The Chicagoland Cooperator.