Arizona court awards interest following workplace accident

On Behalf of | Jul 29, 2015 | Workplace Injuries

One often overlooked issue in workers’ compensation cases is the amount of interest that an insurance company should pay on benefits awarded following a serious workplace accident. In this respect, the Arizona Supreme Court recently held that an insurance company is on the hook for interest from the moment that an insurance company knows about the workplace accident and the subsequent workers’ compensation claim.

The Arizona Supreme Court’s holding applies to death benefits, which the Court described as a “liquidated claim,” that is, a claim with a readily discernable value. In this case, a man died four years after an on-the-job injury, but his widow alleged that his death was nonetheless at least partially attributable to that injury. The insurance carrier denied the claim in 2009 but, after years of litigation, was told by a court that it had to pay the claim in 2013.

The widow then demanded interest backdated to 2009, the time in which she originally notified the insurance carrier of her husband’s death. She again had to go through legal channels to collect this money, but she recently got relief from the Arizona Supreme Court, which noted that doing otherwise would encourage insurance carriers to stall when being asked to pay benefits.

Interest on benefits is important to families of the working men and women of Arizona because it offsets the natural trend of money to be worth less in the future than it is right now. In other words, a workers’ compensation benefit paid out five years late simply doesn’t have the same value to victims as it would if paid on time. However, recovering interest may be difficult, as is many workers’ compensation cases, and may require the knowledge and skills of an experienced attorney.