Re: Illinois SB 3287 – Loophole Increases Employer Risk For Tort Liability

Statement from Mark Johnston
Director – State Affairs, Midwest Region
National Association of Mutual Insurance Companies

Re: Illinois SB 3287 – Loophole Increases Employer Risk For Tort Liability

SB 3287 eliminates the workers’ compensation exclusive remedy for all safety service organizations except for those ‘wholly owned’ by the employer, its insurer, or its broker. The passage of this bill means more lawsuits and less employer access to valuable workplace safety assistance.

“While it appears that the bill says the loss of immunity only applies to retained third-party service organizations, a careful reading indicates that immunity may not extend to these organizations when they are affiliated with an employer, insurer, or broker in any way other than a 100 percent downstream ownership.

“While a court will have to interpret this language, employers, insurers, and brokers with affiliated safety service organizations can expect tort lawsuits to be filed in conjunction with workers’ compensation claims. Trial lawyers will allege that if the service organization is anything other than an exact downstream subsidiary, the exclusive remedy is not available.

“SB 3287 will require employers, insurers, and brokers to examine their corporate structure to protect their immunity from lawsuits. NAMIC will urge the governor to veto the bill.”

Lisa Floreancig
Public Affairs Director, State & Policy Affairs