When you purchase a workers’ compensation insurance policy, a coverage called employer liability insurance is also included.

Sometimes called Part 2 or Coverage B, this insurance is rarely used in most states, and makes up a very small part of the workers’ compensation insurance premium.

Because of this, you might just pass over this coverage if not for the need to choose employer liability limits.

The basic employer liability limit is usually $100,000/$500,000/$100,000. That’s $100,000 per accident, $500,000 per policy, and $100,000 per employee.

Since an employer liability claim is unlikely, other considerations usually factor into decisions to increase the limits above the basic $100,000/$500,000/$100,000 level.

What employer liability insurance covers

There are only a few rare cases where employer liability insurance coverage might be used by a policyholder.

Some states permit spouses and dependents of injured employees to sue an employer. Employer liability insurance would provide coverage in those cases.

A more common (but still rare) example of when employer liability limits might be used is when an injured employee sues a negligent third party, and that third party sues the employer for contributory negligence.

For example, say a factory worker was injured while using machinery that his employer purchased from another company, and the employee claims the manufacturer was to blame for the injury. The employee might try to sue the manufacturer for damages. The manufacturer might then sue the employer saying the machine had not been properly maintained or the employee wasn’t properly trained to use the equipment. This is called a third party over action. At that point, the employer liability insurance would cover the employer’s possible settlement and damages costs up to the stated policy limits. The employer liability insurance would also cover defense costs until the policy limits have been met by settlement or damages payments. Defense costs are paid outside the policy limits.

Just as with the workers’ compensation insurance portion of the policy, a claim can only be eligible for coverage under the employer liability portion if it stems from an injury determined to be work-related, as defined by state statute.

Choosing employer liability limits

The basic employer liability limit is usually $100,000/$500,000/$100,000.

Oftentimes policyholders who choose to increase their limits do so because of contractual requirements or requests from their umbrella carrier.

For example, a general contractor might require all subcontractors to set their employer liability limits at a particular level. Or, a policyholder’s general liability or umbrella carrier might have similar requirements and ask for increased limits.

For those reasons, it is common to see employer liability limits increased to $500,000/$500,000/$500,000 or $1 million/$1 million/$1 million.

Because the coverage is rarely used, increasing coverage limits is typically inexpensive.

For example, the cost to raise the limits to $500,000/$500,000/$500,000 is 0.8 percent of premium in most states. The cost to increase the limits to $1 million/$1 million/$1 million is 1.1 percent of premium in most states.

Employer liability limits can be confusing, and every policyholder is different, so consult with your agent if you have questions about your specific situation.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

By Cheryl Howland Bowsfield, Senior Defense Counsel with Lynn, Scharfenberg and Hollick

While the federal mandate that large employers must vaccinate employees against COVID-19 was struck down by the United States Supreme Court, employers can still encourage or require employees to vaccinate against COVID-19. This raises the question of compensability for adverse reactions from the COVID-19 vaccine, and related medical treatment and time lost from work. A key factor for workers’ compensation compensability is whether the vaccination was required by the employer.

As with the flu vaccine, the Equal Opportunity Employment Commission and the Occupational Safety and Health Administration have both confirmed that employers can mandate that their workers receive the COVID-19 vaccine as a condition of employment. Those employers that choose to mandate the COVID-19 vaccine will need to accommodate waivers or exemptions for employees objecting on health or religious reasons. Other employers may decide to encourage the vaccine, but not mandate it, by offering on-site vaccinations, payment or reimbursement of vaccine costs, monetary incentives, or as a part of an employer’s wellness program to encourage employees to be vaccinated.

A second key factor for compensability is whether the side effects that occurred from undergoing a COVID-19 vaccination rise to the level of an injury or illness, temporary or permanent. To date, the reported COVID-19 vaccine side effects mirror those that have been seen with the flu vaccine. The most common side effects of the COVID-19 vaccine include swelling or pain at the injection site, tiredness, muscle pain, chills, joint pain and fever. These are usually mild in nature and resolve on their own in a few days. Severe allergic reactions to the COVID-19 vaccination requiring treatment have been reported as rare according to the Centers for Disease Control and Prevention .

What does all this mean in the context of workers’ compensation? Is an adverse vaccine reaction compensable? The answer is that it depends.

To determine whether an adverse reaction is compensable will require an investigation into the facts of each claim, receipt of medical records and consideration of the following:

• Was the vaccine mandated by the employer?
• Was undergoing the vaccine a condition of employment?
• Was there something specific to the employment and/or job duties that put the employee at an increased risk for exposure to COVID-19?
• Does undergoing the vaccine in some way further the business of the employer?
• Is the employee working with COVID-19 positive patients?
• Is the employee required to work with the public?
• Was the vaccine administered at work while the employee was working and being paid?
• Did the employee, for personal reasons outside of their employment, undergo the vaccine?

In states such as Wisconsin, Iowa, Nebraska, South Dakota and Kansas, consideration of the specific circumstances of the vaccination that caused the adverse reaction, as suggested by the questions above, will help to guide the determination of compensability.

For Minnesota claims, there is an additional statutory provision that may need to be considered. MN Stat. 176.011, Subd. 16 specifically states “an injury or disease resulting from a vaccine in response to a declaration by the United States Department of Health and Human Services to ‘address an actual or potential health risk’ related to the employee’s employment is an injury or disease arising out of and in the course of employment.” Thus, in Minnesota where the COVID-19 vaccine reaction rises to the level of an injury or disease, and was related to the employee’s employment, the medical treatment and any lost time from work most likely would be compensable.

If an employer mandates vaccination, or strongly encourages the employee to obtain the vaccine for work-related reasons, the scales will more likely tip in favor of compensability.

The COVID-19 vaccine-related reaction claims may contain varying facts and medical situations. Please contact your attorney before making any employment or workers’ compensation liability determinations.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

On February 3, 2022 Minnesota Gov. Tim Walz signed a bill into law that reinstated and extended the rebuttable COVID-19 presumption under Minnesota’s occupational disease statute. Minnesota Statutes Section 176.011, subd. 15(f), reinstated what has become known as the COVID-19 presumption law, creating a rebuttable presumption for certain first responders, corrections workers and COVID-19 healthcare workers who contract COVID-19.

The new presumption signed into law on February 3, 2022 is not retroactive, which means any first responders, corrections workers and COVID-19 healthcare workers who contracted COVID-19 after December 31, 2021 (the date the previous presumption sunsetted) through February 3, 2022 were not covered under the presumption. However, they were still potentially covered under other existing occupational disease or injury provisions of Minnesota’s Workers’ Compensation Act.

When not covered by the presumption, workers in Minnesota who believe their COVID-19 infection is a direct result of their employment are able to file a claim to pursue compensation under the existing occupational disease and personal injury provisions.

In summary, the reinstatement and extension of Minnesota’s COVID-19 workers’ compensation presumption law provides:

• A defined list of occupations covered by the presumption of COVID-19 as an occupational disease:  firefighter; paramedic; nurse or health care worker, correctional officer, or security counselor employed by the state or a political subdivision at a corrections, detention, or secure treatment facility; emergency medical technician; a health care provider, nurse, or assistive employee employed in a health care, home care, or long-term care setting, with direct COVID-19 patient care or ancillary work in COVID-19 patient units.
• Those on the list of covered workers can show they contracted COVID-19 by a positive laboratory test or, if a test is not available for the employee, by diagnosis and documentation from a licensed physician, physician’s assistant, or advanced practice registered nurse (APRN);
• The presumption is rebuttable by the employer and insurer only by a showing that the employment was not a direct cause of the disease;
• The date of injury for this presumptive COVID-19 is either the date the employee was unable to work due to the diagnosis, or due to symptoms that were later diagnosed as COVID-19, whichever occurred first;
• If an employee who has contracted COVID-19 does not fall under the new presumption, they still have the right to file a claim under the existing occupational disease and personal injury provisions of the Minnesota Workers’ Compensation Act.

This COVID-19 presumption legislation is effective for employees who contract COVID-19 on or after the day following enactment (April 8, 2020) through December 31, 2021, and once again is effective the day following enactment (February 3, 2022) through January 13, 2023.

For more information on the law, see the Minnesota Department of Labor and Industry’s Frequently Asked Questions document .

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

By Peter F. Lindquist, Esq. Defense Counsel with Lynn Scharfenberg and Hollick

The Minnesota Supreme court issued two companion decisions on October 13, 2021 – Musta v. Mendota Heights Dental Center, and Bierbach v. Digger’s Polaris – addressing a burning question on the minds of many in the Minnesota workers’ compensation world: Can an employer and insurer be required to pay for an injured worker to treat their work-related condition with the use of medical cannabis, even if the use of medical cannabis is prohibited by federal law?

In these cases, the Minnesota Supreme Court answered “No.” Due to issues of “federal preemption,” Minnesota employers and workers’ compensation insurers cannot be compelled to violate the federal Controlled Substances Act by providing for an employee’s use of medical cannabis, even if use of medical cannabis a is legal under the Minnesota Medical Cannabis Therapeutic Research Act.

By way of background, the employees in both Bierbach and Musta had been certified to treat their work-related injuries with medical cannabis by their treating doctors. That treatment was unsuccessfully disputed by the employer and insurer in the Bierbach case, but reasonableness and causal relationship was stipulated to in the Musta case. The primary issue in both cases was the federal preemption defense. The compensation judges in both cases found that the Minnesota Medical Cannabis Therapeutic Research Act was not preempted by the federal Controlled Substances Act.

On appeal, the Workers’ Compensation Court of Appeals determined that they did not have jurisdiction to decide issues relating to the applicability of federal laws and could not decide the federal preemption issues. They therefore upheld the award of medical cannabis in both cases.

The Minnesota Supreme Court noted that the compensation judges’ order made it impossible for the employers and insurers to comply with both state and federal laws. The Court reasoned that ordering the insurers to reimburse for medical cannabis was tantamount to requiring them to aid and abet the commission of a federal crime. Because the Supremacy Clause of the US Constitution states that when “there is any conflict between federal and state law, federal law shall prevail,” the Court ruled that the compensation judge’s order is preempted by the federal law and reversed the appeals court and compensation judge’s award of reimbursement for medical cannabis.

These decisions create a new bright-line rule regarding the compensability of medical cannabis in workers’ compensation claims. Following to these decisions, insurers now have an almost absolute basis to deny a request to reimburse expenses for medical cannabis, as they cannot be required to violate federal law. This applies even if the treatment with medical cannabis is found reasonable and necessary from a medical provider.

The employees in both cases have the right to appeal these decisions to the U.S. Supreme Court, and as of the writing of this article it appears that they are likely to do so. It will be some time before there is any indication as to whether the Supreme Court decides to hear the appeal. Unless the U.S. Supreme Court overturns the Minnesota Supreme Court’s decisions, the only remaining means for the federal preemption defense to be changed or limited would be for U.S. Congress to pass, and the President to sign, legislation modifying the Controlled Substances Act.

Given how divided the federal government and nation have been on the issue of marijuana legalization, I do not think we should expect for there to be any change in this manner for the foreseeable future.

Click here to read the Supreme Court’s decision in Musta v. Mendota Heights Dental Center

Click here to read the Supreme Court’s decision in Bierbach v. Digger’s Polaris.

by Kathy Bray, Esq.

When you hear the word “bullying” do you think of a child being taunted on the playground, or a teen being harassed online?

Unfortunately, bullying doesn’t end with childhood. The Workplace Bullying Institute estimates that 60.3 million U.S. workers are affected by bullying.

As an employer, running an inclusive, respectful and bully-free workplace can help your employees and your organization thrive.

The following are some basics for employers on workplace bullying and how to prevent it.

What is workplace bullying?

It’s repeated, harmful, targeted behavior toward one or more persons at work. It can take the form of verbal abuse, threats, humiliation, intimidation, targeted practical jokes, purposeful misleading, unjustified denial of time off, excessive performance monitoring, or overly harsh or unjust criticism, according to Healthline .

How prevalent is workplace bullying?

In a 2017 Workplace Bullying Institute survey , 38 percent of workers responded that they had been bullied themselves, or witnessed it.

What can employers do to prevent workplace bullying?

As an employer, you can institute policies and procedures to make your workplace welcoming for all. Take the following steps to promote a workplace that supports an open exchange of ideas, without fear of belittling or disrespect:

• Create a workplace civility policy that sets the tone for a professional, respectful work environment. These policies can go beyond the law to address verbal and social bullying.
• Employ thorough hiring practices that will weed out potential bullies.
• Call references and past employers, and ask about whether the job candidate exhibited threatening or violent behavior.
• Do a thorough criminal background check.
• After hire, make anti-bullying and anti-harassment training part of your orientation process. Make sure you have policies listing guidelines for appropriate employee conduct.
• A retaliation policy is also important. By prohibiting retaliation against anyone who reports a violation of the law or company policy, you’ll make it more likely that someone will come forward if they’re being bullied.

Is it illegal?

That depends on the situation. If the bullying is based on race, color, religion, gender (including pregnancy), national origin, age (40 or older), a disability or genetic information it’s possible it could be a form of harassment , which is illegal. If you are operating in one of the 22 states or the District of Columbia with laws expressly preventing discrimination based on sexual orientation (e.g., Minnesota, Iowa, Wisconsin), bullying on that basis also could be actionable. Physical violence and threats are also illegal.

There’s a national campaign to pass a Healthy Workplace Bill , which would make workplace bullying illegal and allow workers to sue their bullies individually. The bill has been introduced in 30 states, according to the Workplace Bullying Institute website, but Puerto Rico is the first in the United States to enact a workplace bullying law, which was signed into law in August 2020 .

What does workplace bullying have to do with workers’ compensation?

Under the Occupational Health and Safety Act of 1970 , employers are required to provide a safe workplace. One aspect of workplace safety is addressing the risk of workplace violence , which OSHA defines as “any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site.”

Getting employees back to work as soon as they are medically able is an important goal following an occupational injury. Creating a safe and positive workplace will increase the likelihood of return to work success.

Other resources:

• “5 powerful apps and resources to tackle workplace bullying and harassment ” from Forbes
• “9 things HR needs to know to curb bullying at work ” from HR dive
• “5 Strategies to Combat Workplace Bullying ” from EHS Today
• “Effectively Addressing a Workplace Bully ” from Entrepreneur

Iowa Workers’ Compensation Commissioner Joseph Cortese determined that an injury to a muscle in the rotator cuff is considered a shoulder injury for the purpose of determining permanent partial disability benefits.

This is important because shoulder injuries are listed on the state’s workers’ compensation schedule, which provides a formula to calculate permanent partial disability benefits for listed body parts. This makes it much simpler to determine the dollar amount of benefits owed.

This determination was made in the case of Mary Deng vs. Farmland Foods, Inc., and reversed a previous decision of a deputy commissioner.

The Minnesota Supreme Court addressed the rights of intervenors in workers’ compensation proceedings in the August 12, 2020, decision of Koehnen v. Flagship Marine Company and Auto Owners Insurance Company.

The outcome of the case provided some certainty in the workers’ compensation system by confirming that intervenors risk losing their right to recover payments, or other interests, if they decline to participate in the proceedings. Intervenors are third parties who provide services or paid benefits to or on behalf of an injured worker.

In this case, Keith Johnson, D.C. was provided with notice of the right to intervene and chose not to do so in a pending workers’ compensation proceeding. The employee went on to settle his claim with the employer and insurer, and the intervention interests were resolved with the settlement.

A Workers’ Compensation Judge at the Office of Administrative Hearings then issued an award that extinguished the right for Johnson to recover payments, and shortly thereafter, the chiropractor filed a petition for payment of medical expenses.

The employee, the employer and insurer filed motions to dismiss, which the Compensation Judge granted. Johnson then appealed the decision all the way to the Minnesota Supreme Court after the Workers’ Compensation Court of Appeals affirmed the order dismissing Johnson’s petition.

The Court found that the chiropractor chose not to be a party to the case and pursue reimbursement when he failed to participate in the case proceedings. The appellate courts affirmed the chiropractor had no authority or standing to file a petition for reimbursement under the Minnesota Workers’ Compensation Act, or to challenge the ruling that extinguished the chiropractor’s potential intervention interest.

In the end, the Court held that an intervenor who is properly notified of their right to intervene in a workers’ compensation proceeding must either intervene or potentially have their reimbursement rights taken away.