Wednesday, June 29, 2005

Killing Contractors Is Bad Business

Workers Comp Insider goes into depth about the how much more it has cost BP to kill contractors instead of its own employees.
Had the killed and injured workers been employees of BP, workers comp would be the exclusive remedy. Dependents of the deceased workers would be entitled to death and dependency benefits; the injured workers would collect indemnity benefits and all their medical bills would be paid. Even though there are some indications that the company failed to follow through on safety issues, even though the company may have been in some respects negligent in their operation of the facility, employees would be limited to the statutory benefits under workers comp. Employees cannot sue their employers for work related injuries. Under the usual workers comp benefit structure, the fatalities would generate claims valued at less than $1 million; for the seriously burned, who face years and years of treatments, you might see reserves in the $3 to 5 million range. It's hard to believe, but these amounts are far less than what BP is now facing.
Indeed. As we have learned, BP ended up paying tens of millions per fatality.