A lot of people have heard of the term “bad faith” when it comes to insurance claims. Most people do not know what it means. It applies when an insurance company acts dishonestly or fraudulently in how they handle a case.
A caller to our office actually had a great understanding of how bad faith law works as she used to be an insurance adjuster. She had been injured on the job in Chicago and can not go back to the work she was doing (not insurance anymore). Her doctor has given her permanent restrictions that her employer can not accommodate. She has had neck and shoulder surgeries. The insurance company has cut off her medical care and payments. She called me wanting to sue them for bad faith. Surprisingly, she did not yet have a lawyer even though her injuries were severe and three years old.
Link to Bad Faith And Illinois Workers’ Compensation Law Bad Faith And Illinois Workers’ Compensation Law
Although bad faith is an insurance term, it does not apply to Illinois workers’ compensation cases. That is because work comp claims are not lawsuits, but instead administrative claims for benefits.
I told this to my caller and she said, “So does this mean the insurance company can do whatever they want and get away with it even if it is fraud?!?!” She was not happy with my answer, but fortunately gave me a chance to explain.
There is a process for going against the insurance company when they act inappropriately. It is not called a bad faith lawsuit, but you should not worry about terms. Worry about rights and results.
Under Illinois work comp law, we can file a petition for penalties (which go in your pocket) and fees (which cover our attorney fees so that is also more money in your pocket). The penalties can be severe, up to 50% of the amount they owe you, plus they have to actually pay what they owe. They can also have a $30 a day penalty up to $10,000 for unreasonable lateness with TTD benefits.
To get this, we have to show that their behavior was “unreasonable or vexatious” or there was an intentional underpayment. In plain English, this means that they did not pay benefits and did not have a good reason for their failure to pay. There is no real controversy and any denial is frivolous.
Link to How To Get Penalties And Fees How To Get Penalties And Fees
To get these benefits, we file a motion for penalties and fees at the Illinois workers’ compensation commission. The employer (through their insurance company) then has 14 days to respond in writing to explain their reasons for the denial.
In other words, this can put pressure on them to do the right thing because they have a lot of risk and can not just blow you off anymore.
So while this is not a “bad faith” lawsuit, it is a way to hold them accountable for acting in bad faith. And that is really all that matters. You getting your benefits and them not getting away with a bunch of bs.
If you have a scenario you want to discuss, please reach out for a free consultation any time.