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California Workers’ Comp Order Opposed by Insurers

The industry says the governor’s order jeopardizes the stability of the state’s workers’ comp system.
  • Timothy Darragh
  • June 2020
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Insurers and business groups are coming out against California Gov. Gavin Newsom's executive order creating a temporary presumption that workers who come down with the COVID-19 virus are eligible for workers' compensation.

Newsom said the May 6 order covers workers who are required to work outside the home while a stay-at-home order remains in place for nonessential employees, and will help them get the care they need.


The executive order will create a serious burden on the state’s workers’ compensation system and could lead to financial hardships for small businesses that need to survive to protect the job market for workers in the state.

Erin Collins
National Association of Mutual Insurance Companies


But insurance industry representatives said the order would end up making employers foot the bill for those who caught the virus outside the workplace.

The American Property Casualty Insurance Association commended the efforts of front-line workers during the pandemic, but their efforts should not require insurers to pick up costs for which they are not responsible, said David Sampson, president and chief executive officer.

“Gov. Newsom's executive order on workers' compensation is overly broad and could force employers in the public and private sector to cover COVID-19 cases not contracted in the workplace,” he said. “APCIA believes this overly broad executive order jeopardizes the stability of the workers' compensation system. Maintaining proof of a causal connection that a covered injury or disease was contracted in the workplace is essential for a stable no-fault workers' compensation system for employers and employees alike.”

Sampson added it is important to remember that under current law, workers who contract COVID-19 in the course of their employment are already able to file claims and receive benefits.

Erin Collins, vice president of state affairs for the National Association of Mutual Insurance Companies, noted it's been well-documented the virus is transmitted through many types of exposure, including household contact.

“This overly broad coverage is likely to have a significant financial impact upon businesses trying to reopen and restart the state's economy,” she said. “The executive order will create a serious burden on the state's workers' compensation system and could lead to financial hardships for small businesses that need to survive to protect the job market for workers in the state.”


Timothy Darragh is an associate editor, BestWeek. He can be reached at timothy.darragh@ambest.com.


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