by Doug McCoy
Each year in this country approximately 6000 people
lose their lives while working. In
1999 the Bureau of Labor Statistics reported 6055 deaths that occurred on the
job. On September 11, 2001 it is
believed that nearly that many were lost in New York City, Washington, D.C. and
Pennsylvania.
It’s too early to be very precise on the cost to
the workers’ compensation insurance industry.
Estimates ranging from $1 Billion to $6 Billion have been reported.
The problem with coming up with a number is the variables based on state
benefits and dependency. Those who predict $1 Billion say it is a conservative
estimate of the ultimate cost.
The majority of those affected were residents and
workers from New York. The
workers’ compensation statute in New York State provides benefits of up to
$400 per week. The dependants of a
worker killed on the job in New York could receive $20,800 per year for the
period of dependency, which is until age 21 for children or until a spouse dies
or remarries and then a lump sum of two years is paid.
The injured survivors of the September 11 tragedy
would receive unlimited medical as well as wage replacement benefits allowed by
statute. Not only those people in
the Pentagon, World Trade Center or on the airplanes used by the hijackers were
injured. People in adjoining
buildings were injured sitting at their desks or when they fled their workplace
for safety.
Of real concern is post traumatic stress disorder, a psychological reaction that could remain with those exposed to this trauma for years to come. Bruce Blythe, CEO of Atlanta based, Crisis Management International (CMI) says that his company is providing services for employees of hundreds of impacted companies. CMI has over one hundred crisis management mental health professional on site in the City of New York being dispatches from a temporary command center located in the Park South Hotel.
Blythe says that early intervention after exposure to
such a tragedy can help prevent the long-term effects on the mental health of
workers. Blythe also says that the
impact is not only in New York. CMI
is providing intervention services for employees countrywide that have been
affected by this tragedy. Counselors
have been dispatched to cities such as Chicago, Los Angeles, Boston, Phoenix,
Dallas, Houston and Washington DC. For more information about services available
to help employees after a crisis see www.cmiatl.com.
The New York Workers’ Compensation Board has set up a special web page to assist individuals with questions about filing claims resulting from the September 11 tragedy. http://www.wcb.state.ny.us/design/framework/emergencyinfo.htm
It is safe to say that the loss will impact the
future of workers’ compensation costs for businesses in America.
Industry experts have said that the long-term impact will be to further
harden the market resulting in higher premiums.
They consider the “silver lining” in the tragedy to be higher rates
for primary and reinsurance companies.
The insurance industry in this disaster is closer to
the loss than normal. Many industry
employees were personally involved in the disaster. The world’s largest insurance brokers, Marsh and Aon were
among the tenants on the top floors of both towers.
As of today, many of their employees remain unaccounted for.
Prior to the events of September 11, 2001 the
greatest disaster to impact Munich-Re was the San Francisco earthquake of 1906.
Now the world’s largest re-insurer is expecting nearly $1 Billion in
losses. The remainder of the
anticipated $30 Billion for all types of claims is spread over several other
re-insurers including Chubb and AIG both US re-insurers.
Munich-Re and Allianz are German companies, Swiss-Re
and Zurich Financial are based in Switzerland, XL Capital and ACE in Bermuda and
scores of others truly spread the loss worldwide.
We can expect to see higher premiums for businesses
throughout the country. Some
businesses will not survive because of the increased cost. Those that do survive will pass the increase along to their
customers. Everyone will ultimately
pay the losses in increased prices for goods and services.
We will be counting the losses for months to come and paying the losses
for years to come.
The birth of workers’ compensation in this country
came in New York State just after the turn of the last century.
But the New York Court of Appeals ruled the new law unconstitutional.
The next day a tragedy occurred that up until now may be the worse
disaster involving workers in the State of New York.
The top three floors of the ten-story Asch building
on the corner of Washington and Greene streets went up in flames and smoke.
146 workers, mostly women and young girls died in less than fifteen
minutes. Firefighters were hampered
in their attempt to approach the building by the bodies of victims who had
jumped, forty-seven in all.
That disaster March 25th 1911, ninety
years ago is felt to have been the catalyst to make the new no-fault system of
workers’ compensation possible to be implemented in New York and other states
of our country. The disaster we all
witnessed on September 11, 2001 will not destroy the system but underscores the
need for workers’ compensation.