Have you ever had your legitimate workers’ compensation claim denied without explanation? Or perhaps you’ve experienced unreasonable delays in receiving your benefits while medical bills piled up? Maybe your insurance adjuster stopped returning your calls after your workplace injury. These frustrating scenarios happen more often than you might think, and they can leave injured workers wondering about their legal options. When workers’ compensation insurers (or even your own company) act in bad faith, you might have grounds to sue them directly. How does it work? Paula Robinson can break it down for you.
Is It Possible to Sue Your Workers’ Compensation Insurance Carrier?
Yes, you can sue a workers’ compensation insurance company under specific circumstances despite the generally exclusive remedy nature of workers’ compensation benefits. While the Pennsylvania Workers Compensation Act typically limits an injured worker’s recovery to the benefits provided through the workers’ compensation system, exceptions exist when insurance companies fail to fulfill their legal obligations. Across various categories of workers’ compensation claims, carriers who deliberately mishandle these claims or engage in deceptive practices can be held accountable. This legal pathway often involves demonstrating that the insurer acted in “bad faith” — a concept with significant implications for your workers’ compensation claims and your ability to recover fully from workplace injuries.
What Constitutes “Bad Faith” in Workers’ Compensation Cases?
Bad faith refers to situations where workers’ compensation insurance companies deliberately act unreasonably or dishonestly when handling claims from injured workers. Unlike simple mistakes or administrative delays, bad faith involves intentional misconduct that violates the insurer’s duty to handle claims fairly and promptly. Insurance companies that carry workers’ compensation insurance have legal obligations to process claims honestly and efficiently. When they deliberately sidestep these responsibilities, they may be acting in bad faith, opening themselves to legal liability beyond the workers’ compensation system.
Examples of Bad Faith Actions
Here are clear examples of what bad faith typically looks like in workers’ compensation cases:
- Deliberately lost paperwork or claims documents.
- Unreasonable delays in authorizing necessary medical treatment.
- Arbitrary denial of legitimate claims without investigation.
- Terminating benefits without medical evidence supporting the decision.
- Intentionally misrepresenting policy provisions to deny coverage.
- Failing to communicate about your worker’s comp claim status for extended periods.
- Making lowball settlement offers that don’t cover basic medical expenses.
- Threatening or intimidating injured workers to accept inadequate settlements.
- Ignoring medical evidence that supports your claim.
- Conducting surveillance with the sole purpose of manufacturing evidence against you.
How to Sue a Workers’ Compensation Insurance Company for Bad Faith
Filing a bad faith lawsuit against a workers’ compensation insurer requires careful preparation and strong evidence. First, you must document all interactions with the insurance company, including dates, times, and details of conversations. Save all correspondence, claim denials, and medical records that demonstrate the legitimacy of your claim. Pennsylvania has specific procedural requirements for bad faith claims against insurers that you must follow precisely.
The lawsuit itself must clearly demonstrate that the insurance company’s actions were not just negligent but deliberate and unreasonable. You’ll need to show how these actions directly caused harm beyond what would have occurred with proper claims handling. In successful bad faith cases, injured workers may recover damages for financial losses, emotional distress, interest on delayed benefits, and, in some cases, punitive damages designed to punish particularly egregious insurer behavior.
Other Reasons to Sue Workers’ Compensation Insurance Companies
Beyond bad faith claims, several other situations might justify legal action against workers’ compensation insurers. If the insurance company interferes with your medical treatment by pressuring doctors or dictating care against medical advice, you might have grounds for legal action. Similarly, when insurers violate privacy laws by improperly sharing your medical information, this could constitute grounds for a lawsuit separate from your worker’s compensation benefits claim.
Railroad workers face a different system altogether under the Federal Employers Liability Act (FELA). This act allows direct lawsuits against employers rather than going through workers’ compensation. This distinction creates important differences in how claims proceed and what damages may be available, including pain and suffering compensation not typically covered under workers’ compensation.
In some cases, insurers may also violate state insurance regulations or engage in deceptive business practices that violate consumer protection laws. These violations can lead to regulatory complaints or additional legal actions beyond the workers’ compensation system. When systematically improper conduct affects multiple injured workers, class action lawsuits sometimes become viable options for addressing widespread misconduct by workers’ compensation insurance providers.
Can You Sue After Accepting Workers’ Compensation Benefits?
Yes, accepting workers’ compensation benefits doesn’t necessarily prevent you from later suing a workers’ compensation insurance company for bad faith actions. The acceptance of benefits only confirms your eligibility for those benefits — it doesn’t waive your rights when the insurance company mishandles your claim. However, timing and specific circumstances matter greatly in these situations.
If you’ve settled your workers’ compensation claim with a full and final release, your options may be more limited, but bad faith actions that occurred before settlement might still be actionable. The key consideration is whether the bad faith occurred during the claims process, even if you eventually received some benefits. For example, if your medical treatment was unreasonably delayed for months before approval, causing your condition to worsen, the eventual payment of benefits doesn’t erase that harm.
How Can You Protect Your Rights When Facing Insurance Company Misconduct?
Have you considered how systematic bad-faith practices might rob you of compensation? When workers’ compensation insurers place profits above their legal obligations, you need strong protection. You can sue a workers’ compensation insurance company when they act in bad faith, but taking on these powerful entities alone presents serious challenges:
- Insurance companies employ teams of experienced defense attorneys.
- The legal procedures for bad faith claims involve complex requirements and deadlines.
- Gathering sufficient evidence requires knowledge of what documentation matters most.
- Determining fair compensation demands experience with similar cases.
- Insurance adjusters are trained to minimize claims and may use your words against you.
Paula Robinson can protect injured workers when insurance companies break the rules. Paula is certified as a specialist in the practice of workers’ compensation law by the Pennsylvania Bar Association’s Section on Workers’ Compensation Law, as authorized by the Pennsylvania Supreme Court. This reflects her deep knowledge and proven ability to handle complex workers’ compensation matters, including bad-faith cases against insurers who fail to meet their obligations. Speak with her today to see if you should sue a workers’ compensation insurance company.
