Terrorism Insurance Surcharge Is Coming Up for Renewal, But Lawmakers Question the Workers Comp Add-On
For 10 years, states across the US have paid a small workers comp surcharge that would cover employees and businesses in the event of a terrorist attack.
The bill is now approaching renewal, and lawmakers are beginning to question the validity of the workers comp addition.
Although the amount each state workers comp insurer charges is relatively small – in Illinois, the surcharge is around 4 cents, while in Virginia, the surcharge is about 3 cents – but the “terrorism insurance” charge is seen as a revenue stream for insurers, with no benefit for businesses.
“It’s free money to the insurance company,” said Sheryl Frieman, president ofGolden Valley-based Array Financial Services Inc.
“I just think it’s bogus,” said Naomi Williamson, owner of Sanctuary Restaurant inMinneapolis. “It’s like a bank fee, a hidden fee that’s giving me something that’s not of value to me.
“When’s the last time we had a terrorism event in Minnesota?”
In 2002, President George W. Bush enacted the Terrorism Risk Insurance Act (TRIA) to help stabilize the insurance market after the terrorist attacks on September 11th. Insurers eventually paid out more than $30 billion in claims related to the attack, including workers comp coverage for post-traumatic stress disorder in emergency responders and the attacks’ survivors.
The workers comp add-on is not mandatory, but about 65% of US businesses pay it. Lenders often require the terrorism insurance to cover commercial real estate. Many workers comp insurers automatically began charging employers for terrorism insurance. Although the bill has been extended twice, it was meant as a temporary solution to catastrophic terrorism losses – insurance would cover the first $100 million in losses, then the federal government would pick up the rest of the tab.
However, TRIA has never actually been used. The most recent act of terrorism in the US, the Boston Marathon Bombings, did not meet the act’s threshold of $5 million in damages; additionally, the attacks did not take place at a business or work environment, therefore the workers comp clause could not be used.
Regardless, insurance companies are pushing hard to renew the bill.
“The threat of terrorist acts remains a largely unwritable risk for insurers,” the American Insurance Association says on its website.
Workers Comp in South Carolina
Any full-time employee (working for an employer with four or more employees) who has an employment related injury and needs medical attention should be covered under workers’ compensation insurance. It doesn’t matter if the injury was a complete accident or the fault of a co-worker.
South Carolina does not award workers compensation to workers who are intoxicated on the job. This accusation could be used as “employer retaliation,” however, and the claim is difficult to prove. Just because your employer, or your employer’s insurance company, denies your workers’ compensation claim does not mean that they are right to deny your workers’ comp benefits.
If the employer is using a legal reason to deny workers’ comp, you need to determine if the reason is valid, or if it is a false accusation against you (such as a work injury due to intoxication). Your employer also may not want to accept your work injury, especially if your injury is difficult to prove and requires you to seek legal assistance. Some job-related injuries employers may initially deny are from repetitive injuries, stress, mental conditions, and environmental conditions such as claims of toxic exposure.
The Strom Law Firm Can Help with Workers Comp Claims in South Carolina
The workers comp lawyers at The Strom Law Firm, LLC proudly seek justice on behalf of employees injured or killed on the job who work for private companies, as well as employees working for local county, city, and state government. We are licensed to practice throughout South Carolina, as well as Georgia and New York. If you are confused about worker’s comp laws, or have had your worker’s comp claim denied, contact us. We offer free consultations to discuss the facts of your case.803.252.4800.