Bad Faith Workers' Compensation Claims in New York

What Happens When a Workers’ Compensation Insurer Acts in Bad Faith?

Workers’ compensation insurers, as well as the employers who purchase their policies, have legal obligations under New York law to handle claims fairly and promptly. They must:

• Investigate workers' compensation claims thoroughly and without undue delay
• Provide accurate information about an employee's rights and benefits
• Pay out approved claims promptly according to New York law
• Treat claimants fairly and without discrimination

Unfortunately, some employers and insurance companies don’t play by the rules. Sometimes, it’s because they’re more concerned about shielding themselves from reputational harm, but often, it has to do with money. As corporations, workers’ compensation insurers are in business to collect premiums and rack up profits. They’re not interested in helping people and they’ll look for any way to dispute, deny, and underpay valid claims.

Fortunately, New York law imposes consequences upon those who engage in bad faith practices that harm workers’ compensation claimants. For example, employers or insurers who acts in bad faith may face:

• Penalties and fines imposed by the New York State Workers' Compensation Board
• Increased insurance premiums for the employer
• Civil lawsuits and exposure to liability for compensatory damages, punitive damages, and attorney fees

Suing for Workers’ Compensation Bad Faith

If your workers’ compensation claim was handled in bad faith by your employer and/or their workers’ compensation insurance carrier, you may have grounds to pursue legal action. Here are some key steps to take:

1. Seek Legal Counsel. Consulting with a lawyer is vital, as they’ll be able to help you navigate your case. You’ll want to ensure the lawyer you choose has experience handling matters of workers’ compensation in New York, and with bad faith insurance actions.
2. Documentation Gathering. Gather every piece of documentation regarding your workers' compensation claim, such as medical reports and any communication you've had with the employer or insurance company. These will be critical to supporting your case.
3. Review Actions or Inactions. Understand and list specific instances where the employer or insurer failed to act properly, like unjust denials or prolonged delays in processing your claim without a reasonable basis.
4. File a Complaint. File a detailed complaint with the New York State Workers’ Compensation Board and request a hearing to address the bad faith actions.
5. Prepare for the Hearing. Work with your attorney to prepare a compelling argument and organize your supporting evidence and testimony for the hearing.
6. Present Your Case. With your lawyer, attend the scheduled hearing and present the evidence of bad faith before the Workers' Compensation Board.
7. Await the Decision and Appeal if Necessary. If the decision isn't in your favor, your attorney can help you decide whether to appeal and continue pursuing the matter in court if appeals are exhausted. Our attorneys have extensive experience helping clients navigate the NY workers’ compensation appeals process and can guide you through these steps.
8. Pursue a Civil Action. If necessary, file a lawsuit in New York civil court seeking additional damages for the bad faith handling of your claim.