In a previous post, we discussed the process of Loss Transfer and specifically why it matters to Workers’ Compensation carriers. In connection with the Workers’ Compensation aspect, a workers’ compensation carrier can recover up to $50,000.00 by way of arbitration in a Loss Transfer claim through the Arbitration Forums. However, this does not mean that you can simply assert a right to $50,000.00 against another insurance company and think this is enough. Indeed, when arbitrated, liability still has to be proven as well as damages.
The Law.
The relevant statute which breaks down what can and cannot be recovered is Article 51 of the New York Insurance Law which is also referred to as the “No Fault Law.” This law requires that any owner of a vehicle operating in New York carry coverage with $50,000.00 minimum limits which cover basic economic loss. Luckily, we are not forced to figure out and simply guess what expenses constitute basic economic loss. The statute makes specific reference to “basic economic loss” and defines just exactly what that means.
The law defines basic economic loss as necessary expenses incurred for medical treatment, loss of earnings from work and reasonable and necessary expenses up to $25 a day. [NY Insurance Law §5102(a)(1)]. Please note that there are a number of nuances when litigating what expenses fit into these definitions.
Limits on Recovery.
The entirety of the entitlement to $50,000.00 in basic economic loss is contained within that section of the law. Indeed, this definition of basic economic loss is what the carrier is entitled to as first party benefits because when the Workers’ Compensation carrier pays out the indemnity and medical benefits in a situation where the claimant is involved in a motor vehicle accident while in the course of his/her employment, the Workers’ Compensation carrier becomes the primary insurer. That primary insurer is responsible for payment of the basic economic losses noted above and the legislature has ensured that the Workers’ Compensation carrier is not stuck absorbing the costs which would have been the responsibility of the No Fault carrier but for the work related nature of the accident.
Generally speaking, most of the indemnity and medical benefits which a Workers’ Compensation carrier pays out for in the life of a regular Workers’ Compensation claim are the same kind of expenses that a No Fault Insurer would be liable for in a No Fault claim since both, in this kind of scenario, would involve damages stemming from a car accident. Therefore, there tends to be an overlap between the kinds of expenses paid out.
Again, please note that the Loss Transfer route only allows for collection of up to $50,000.00 in first party benefits. What happens to any additional first party benefits you have paid out over $50,000.00? You can still pursue that amount through subrogation and assertion of your Section 29 lien rights under NY Workers’ Compensation Law.
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