The insurance industry is in the business of “Risk Management.” They people who work in the claims departments do not want to make decisions on their own, take risks and look foolish by paying out too much money in cases where the injured worker is not disabled, incapable of working at a light duty job or unlikely to need significant future medical care. 

Adjusters and others who work on the claims side of an insurance company (as opposed to the money making insurance policy sales side), must have or get “authority” before they can settle a case. In other words, their company must give them an amount of money they can use to try to settle the case. Adjusters cannot just write checks of any amount, whenever they want. Each insurance company has its own process, sometimes involving computer programs that direct how much authority will be given (even before the advent of AI!). Other insurers still use human beings, and there are insurance carriers that utilize a blend of input.

Experienced Herndon Virginia Workers Compensation lawyer Doug Landau has successfully negotiated with all three kinds of companies. Lawyer Landau notes that: “front line” workers comp adjusters are usually given $5,000-25,000 in authority. Claims Managers may be given more authority ($50,000-100,000). Claims Committees are used by some carriers,  apparently since no one wants to be responsible for making a bad decision on their own. Supervisors may be calling the shots beyond that, and then the file may go to regional offices fr even greater monetary authority to settle. Beyond that, for our  MCU (“Major Claims Unit”), CAT (short for “Catastrophic Cases”) & our 7-figure cases, the home office generally needs to review the file, decide on pulling the trigger for extensive defense and litigation costs, and then give ultimate authority. It is like the layers on an onion. Whereas the ABRAMS LANDAU Workers Comp team can move quickly, the insurance industry moves with all the speed of a snail!”

The claims adjuster trainees, claim adjusters, senior claims adjusters, supervisors, managers and Vice President all have an increased authority levels for settlements and/or file reserves. Each adjuster likely has several hundreds of files, so there is a limited amount of time they can spend on each case. Plus, the cases that are going to be tried tend to have greater expense, due to the charges of the insurance defense lawyers, expert medical witnesses, vocational rehabilitation vendors, nurse case managers, utilization review team, private investigators and medical records reviewers. The adjuster may have to hold six or seven meetings just to have the reserves or settlements approved internally. 

Just like with the car accident adjusters in the Property & Casualty Claims divisions of insurance companies, Workers Compensation adjuster authority levels typically increase from entry-level positions handling simple, low dollar value “medical-only” claims, to senior or specialized roles managing complex, high-value claims. The specific levels and their responsibilities can vary by company and state, but typically include generally include: claims specialists, senior specialists, and catastrophic or MCU claims adjusters, who have the greatest authority to manage files and utilize high levels of reserves.

Here’s a more detailed breakdown:

 

• Entry-Level/Medical-Only Adjusters:

  These adjusters handle claims with limited medical treatment and no lost time from work. These files generally do not involve surgery or expensive diagnostic testing. The costs to the file will not likely involve nurse case managers, vocational rehabilitation experts or defense counsel They focus on processing medical bills and may have limited authority to settle claims. 
• Claims Specialists/Adjusters:

  This level is responsible for managing a significant caseload of workers’ compensation claims, including investigation, benefit determination, and settlement negotiations within established authority limits. It is not unheard of for adjusters at this level to have many hundreds of files. Because of this, these adjusters rarely leave the office to do their own investigation, meet with injured workers, their counsel or even their own insureds, the employers! These adjusters will outsource nearly everything, from investigation, to medical bill audit, to payments for medications and treatment.,
• Senior Claims Specialists/Adjusters:

  These adjusters are typically more experienced, with significant experience with the company, its workers compensation claims handling processes and they may have accumulated industry continuing education credits (“CEUs”). They can handle more complex and higher-value claims, potentially with broader settlement authority. They may also train and mentor less experienced adjusters. Some of these specialized adjusters have legal training. Doug Landau has noted that there are adjusters in this category who are more effective than the legal counsel their companies retain to represent the interests of their insured. awyer Landau has even gone to Mediations with these experienced adjusters and been impressed with their abilities. Even in cases where the insurance company’s interests (and those of the employer) are represented by counsel, these adjusters will effectively participate in workers comp “Full & Final Settlement” Mediations.
• Specialized Adjusters:

  Some companies have specialized roles like catastrophic (“CAT”) claims or adjusters, or “Major Claims Unit” (“MCU”) adjusters who handle severe injuries requiring extensive medical treatment and long-term disability, where reserves of 6 figures, to over a million dollars are likely.