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California companies win in worker's compensation dispute

In a recent court case, California employers scored a victory in the legal process as the state's regulators ruled that a national insurance provider had to cease forcing employers to resolve disputes over worker's compensation at an out-of-state location. California's Insurance Commissioner announced a settlement with Zurich American Insurance Co., an Illinois-based firm, which allowed for the arbitration of worker's compensation disputes involving California businesses in the state rather than in Chicago, where the company is located. Employers had complained that this requirement was prohibitively expensive and gave an unfair advantage to insurers, thus forcing them to pay higher premiums. The right to resolve disputes in California is now an option, with the choice left up to the employer.

This case illustrates how difficult it can be for employers to obtain the necessary insurance to provide workers' compensation benefits for sick or injured employees. Employers must deal with the cost of paying the insurance premiums, which can get expensive and suck up a substantial portion of the business' income. Providing for the needs of the employees can be a challenge for employers, as this situation shows.

Workers' compensation benefits are provided by the employer in order to avoid the cost of litigation. They are intended to provide an employee that falls ill or is injured on the job with an income for the employee and their family as a means of support while the employee is unable to work. These benefits are most frequently used in industries where there is a substantial risk of injury to the employer or exposure to harsh chemicals or lack of sanitation that causes sickness.

Any worker injured or taken ill on the job is entitled to receive workers' compensation benefits. They have a right to receive these benefits to recover lost wages, medical bills, and for any disability incurred, and they have a right to receive them for as long as they are unable to work. Anyone injured or sickened while on the job is entitled to receive financial support from workers' compensation benefits.

Source: Los Angeles Business Journal, "State companies win in workers comp insurance disputes," Howard Fine, July 11, 2013

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