Uninsured Employer Defense

HOW HENDRICKSON & PALMER CAN HELP YOU!

If a workers’ compensation claim is pending against your business, Hendrickson & Palmer, P.C., can help to work quickly and efficiently in an effort to protect your business.  Our office handles workers’ compensation defense cases for uninsured employers who would lose significant business and personal assets without representation.  Our experience helping thousands of injured workers and dealing with the Industrial Commission of Arizona’s Special Fund gives our employer clients the upper hand when defending their claims.

Adam Palmer, who is a Certified Specialist in Workers’ Compensation, will investigate the claim of the employee while determining if the employer is in fact uninsured.  In some cases, we are able to discover insurance, while in others, we can help the employer establish new insurance.  If an uninsured business does not actively defend the case nor voluntarily offer benefits, the case goes to the Arizona workers’ compensation court system.  The costs associated with these complex legal issues can single handedly destroy a business.  Many of the clients our Firm represents are small businesses and sole proprietors in contracting and manufacturing professions.  With proper legal assistance, it is often possible to minimize and sometimes eliminate the pending penalties and fines.  We specialize in finding solutions in the face of seemingly impossible odds.

HOW UNINSURED LIABILITY OCCURS!

Arizona Workers’ Compensation laws require that all employers, who regularly hire workers in its customary business, are required to carry workers’ compensation insurance regardless of the number of workers they have, whether those workers are part-time, full-time, minors, undocumented, or family members.  This ensures that if an employee is injured, disabled, or killed in the workplace, compensatory benefits are available to the employee or his/her survivors.  Workers’ compensation is not the same as liability insurance, which provides coverage in the event of a non-employee injury on the premises, or medical insurance, which only covers medical bills for non-work-related conditions.  If an employer does not have workers’ compensation insurance and is not self-insured as required by law, and a worker is injured during the course and scope of his employment, the employer is classified as an “Uninsured Employer.”

DEFENSES AVAILABLE TO UNINSURED EMPLOYERS!

Employers are statutorily required under Arizona law to obtain and maintain workers’ compensation insurance for all employees.  Workers’ compensation insurance is not required for an independent contractor, or a worker whose employment is both casual and not in the usual business of the employer.  Also, workers’ compensation insurance is not required for a domestic servant who works in your home. But it is often unclear who is an employee.  Many times, employers assume that a worker is an independent contractor, not an employee.  The difference between an employee and an independent contractor is not always clear, but the attorneys at Hendrickson & Palmer will fight vigorously on your behalf to ensure that you are not held responsible for paying an improper claim.

For uninsured employers who are otherwise unable to avoid liability, an attorney can assist in building a defense through the most cost-effective means.  After meeting with an attorney to discuss exposure and expectations for defense costs, an attorney can counsel the employer as to what defense is most likely to result in the lowest overall exposure and what the employer can do to minimize defense costs.  There are several defenses that can be raised to show that an employer was not required to maintain insurance and, therefore, is not liable for workers’ compensation benefits.  These defenses include:

  • There was no actual work accident
  • The employee did not sustain an actual or compensable injury
  • Another employer is liable, for example, in situations where contractors and subcontractors are working together on a single project
  • The employer’s workers are independent contractors, not employees
  • The employer is not required to carry workers’ compensation insurance

THE STATE’S ROLE!

When an injured worker files a workers’ compensation claim against an uninsured employer, the Special Fund Division/No Insurance Section of the Industrial Commission of Arizona will assign an attorney to represent the Special Fund.  Many uninsured employers believe that these attorneys represent their interests, but that is not entirely true.  These attorneys represent the Fund’s interests, not necessarily the interests of the uninsured employer.  When uninsured employers do not hire separate legal counsel, they are in many ways unrepresented in the workers’ compensation litigation.  Hendrickson & Palmer does not represent the Fund, and Adam Palmer is one of a very few workers’ compensation attorneys with the level of expertise, the willingness to handle, and the ability to successfully defend and/or reasonably resolve claims on behalf of uninsured employers.

PENALTIES!

Failing to carry workers’ compensation insurance carries grave consequences for employers whose employees are insured on the job.  Employers who violate the Arizona Workers’ Compensation Act by failing to have workers’ compensation insurance can face fines and/or imprisonment.  Under A.R.S. §23-932, failing to maintain workers’ compensation insurance is a Class 6 felony.  In addition to criminal liability, an uninsured employer may be assessed a civil penalty of $1,000.00 for failure to obtain workers’ compensation insurance, whether or not an employee files a workers’ compensation claim.   The penalty is increased to $5,000.00 for a second instance of being uninsured and $10,000.00 for a third offense.  Since the State must pay the claims for uninsured employers through the Special Fund, the Fund will seek reimbursement from the uninsured employer for any benefits paid to the injured worker plus a penalty of 10% of the benefits paid or $1,000.00, whichever is greater.

Call our office today for a free consultation and let us help fight your case and protect your assets.

Phoenix Location

1522 West Thomas Road,
Phoenix, Arizona 85015
Tel: (602) 277-2007
Fax: (602) 277-2009

Prescott Location

115 Grove Ave.,
Prescott, Arizona 86301
Tel: (928) 445-4725
Fax: (928) 445-1782