February 2015 Subrogation Newsletter
Plan For The Best, Expect The Worst, And Prepare To Be Surprised. Thomas Reid once said, “There is no greater impediment to the advancement of knowledge than the ambiguity of words.” Nowhere is this truism as important than in the settlement of third-party lawsuits involving workers’ comp carriers’ subrogation liens and future credits. For lack of as little as proper punctuation, significant subrogation interests can be lost forever. It is important that workers’ comp carriers be excruciatingly detailed and specific with regard to the effect of a tort settlement on both the reimbursement and future credit rights of the carrier.
There is a great deal of confusion in Louisiana regarding whether a workers’ compensation carrier can subrogate against or receive reimbursement from the proceeds of an uninsured or underinsured (UM/UIM) automobile policy. The Louisiana Supreme Court has unequivocally stated that a UM carrier is considered a third person under Louisiana workers’ compensation law. The latest word on the issue came in the 2014 case of Cole v. State Farm Mut. Auto Ins. Co., 149 So.3d 831 (La. App. 2014).
More than 1,000 vehicles a day are damaged by paint overspray in the U.S., resulting in over one-half of a billion dollars in damage and insurance claims annually. Airborne paint overspray results from all sorts of industrial, commercial, and private paint jobs, such as bridges, water towers, and other large and inconveniently located outdoor areas that need painting. When you add this damage to other sources of overspray, such as wet road striping, industrial fallout, and petrochemicals, emissions and flares, the toll on insurance companies reaches epidemic proportions. The insurance industry is left with three options to combat these claims: (1) excluding paint overspray as a covered loss; (2) raising premiums significantly; and (3) subrogation.