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Don’t risk double compensation—Make sure workers’ comp policy is in place

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Here’s a cautionary tale for Indiana employers that don’t carry up-to-date workers’ compensation insurance or that haven’t been approved as self-insured employers. If your policy lapses, you just may find yourself paying double for any work-related injuries.

Recent case: Angela Hobson, a young mother, worked as a pole dancer for Shangri-La, an adult entertainment complex in Fort Wayne. While she was onstage performing her act, she spun around the pole and felt a pull in her neck. The pain spread, and Hobson found she could no longer lift her children or do other household tasks.

Hobson told her employer she had been hurt. She eventually underwent surgery to correct a herniated disk. Because her employer had not posted any notice about workers’ compensation, Hobson waited more than a year before filing a claim. She then found out the company hadn’t been carrying workers’ compensation insurance.

Over Shangri-La’s objection, the Workers’ Compensation Board awarded benefits to Hobson. The employer appealed, arguing that Hobson never told them about the injury. Other employees apparently tried to claim that Hobson never mentioned the injury, and that they didn’t even notice she wasn’t at work when she was having surgery.

The Court of Appeals of Indiana refused to reverse the decision, judging that the employees’ testimonies were suspect. The court chastised Shangri-La for its lack of records and insurance.

Finally, it said Hobson was entitled to double the amount she would have ordinarily received as lost wages because the employer didn’t have insurance. (Wholesalers, Inc., d/b/a Shangri-La v. Hobson, No. 93A02-0702-EX-173, Court of Appeals of Indiana, 2007)

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