Is Your Business Prepared for Legal Disputes?
Last month, the employees of The ALS Group gathered for a crucial session with Maggie Ingels, our Senior Consultant of Claims and Risk Services, to discuss one of the most significant lawsuits currently unfolding in the claims world—the “Tradesman Lawsuit,” which was filed on March 1, 2024. This case is a stark reminder of the complexities and risks businesses face today, particularly in industries like construction, where legal disputes can lead to devastating financial consequences. But it raises an important question: Are you adequately protected against similar risks?
The Details: A Closer Look at the Tradesman Lawsuit
The lawsuit, initiated by Roosevelt Road Re, LTD and its affiliate Tradesman Program Managers, LLC, alleges that 46 named defendants exploited vulnerable immigrant construction workers in a scheme known as the “Fraudulent Treatment Protocol.” This case mirrors several other high-profile legal battles, such as the workmans comp lawsuit and the auto accident injury claim cases that have plagued the industry in recent years. In each scenario, the alleged fraudulent activities involved inflating claims to secure larger settlements.
The Tradesman case is particularly concerning because it involves a wide array of defendants, including physicians, healthcare providers, law firms, and litigation funding companies. This echoes similar patterns seen in the insurance company lawsuit against major corporations like State Farm and Geico, where inflated claims and staged incidents have led to multi-million-dollar settlements.
Are You Adequately Covered?
The Tradesman investigation, which began in late 2020, revealed a disturbing trend: a sharp increase in workers’ compensation (WC) payouts, reminiscent of the Genworth class action lawsuit and National Life Group lawsuit. Tradesman’s payouts surged from $14 million in 2018 to over $142 million by 2022, despite a decrease in construction accidents during this period. This trend has had a significant impact on insurance premiums, much like the BCBS lawsuit and Anthem BCBS lawsuit that led to skyrocketing costs for businesses.
But what does this mean for your business? If you’re involved in industries where legal disputes are common, such as construction, healthcare, or insurance, it’s essential to ask: Is your insurance coverage sufficient to protect against the financial strain of a major lawsuit? For instance, if your company were involved in a class action lawsuit against State Farm homeowners insurance or a Progressive insurance lawsuit, would your current policies provide adequate protection?
Have You Had Someone Check for You?
It’s easy to assume that your current insurance policies are sufficient, but have you ever had an expert review them? Just as you wouldn’t skip regular maintenance on your property, you shouldn’t overlook the importance of a thorough insurance review. A professional risk management consultant can identify any gaps in your coverage that might leave you vulnerable in the event of a legal dispute, such as a class action lawsuit against insurance companies or a bad faith lawsuit.
For example, if your business operates in a state like Florida, where car accident claim injury cases are prevalent, ensuring your policies align with local regulations is crucial. Similarly, if you’re involved in sectors prone to bodily injury claims or auto accident personal injury claims, having comprehensive coverage is vital. Have you considered how long you have to sue after an accident, or whether your policy covers bad faith claims? These are questions that a professional can help answer.
The Cost of Not Knowing
Failing to address these questions can have dire consequences. As we’ve seen with the Tradesman lawsuit, the ripple effects of legal disputes can be immense, affecting everything from your bottom line to your business’s reputation. Understanding the intricacies of your coverage is not just advisable—it’s necessary. Consider the Geico lawsuit involving a woman who sued the company for an STD, resulting in a multi-million-dollar settlement. Cases like this highlight the importance of being prepared for the unexpected.
Moreover, the potential for fraudulent claims in industries like construction highlights the need for vigilance. If you’re not actively managing these risks, your business could be next in line for a costly legal battle. Have you taken the time to ensure your coverage is comprehensive, up-to-date, and tailored to your specific needs?
Conclusion
The Tradesman lawsuit serves as a stark reminder of the complexities and risks businesses face in today’s legal landscape. Whether you’re dealing with construction, healthcare, or insurance, it’s crucial to have the right protections in place. Don’t wait until you’re embroiled in a lawsuit to discover gaps in your coverage. Contact an expert today to review your policies and ensure that your business is fully protected against the unexpected.
If you have any questions on claims or incident response or want to discuss your company’s claims process, please contact Maggie Ingels, Senior Consultant, Claims and Risk Services, at 732-395-4262 or mingels@thealsgroup.com.
