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Texas Supreme Court ruling further shields insurance companies from lawsuits

When an insurer in the Texas workers' compensation system is accused of bad faith -- failing the policyholder -- the Division of Workers' Compensation, which is part of the Texas Department of Insurance, is in charge of policing the insurer. Such policing may involve cease and desist orders and fines.

However, when an insurance company is sanctioned for violating the state Workers' Compensation Act, the worker who was harmed by the violation doesn't necessarily get any direct benefit from the sanction. In fact, a recent Texas Supreme Court decision effectively expands protections for insurance companies accused of intentionally harming workers.

The case involved a false criminal complaint filed by an insurance company against a man who lost an arm and was badly burned in a work accident. In the complaint, the insurance company alleged that the man had falsified his travel expenses for rehabilitation at a gym. The charge against the man was dropped, however, after some basic investigation. Employees at the gym confirmed that the man had been going there to work out.

Still, in his lawsuit, the man said that the insurer continued to deny him benefits, so he sued the insurer for bad faith and malicious prosecution.

The Supreme Court threw out the case, though, saying that even claims of misrepresentation and malicious prosecution should be handled through the administrative processes of the state workers' compensation system. Again, keep in mind that administrative fines against insurers do not directly benefit workers.

The ruling effectively provides another protection for insurance companies that harm claimants. 

Workers injured on the job in Texas may have to fight hard to get the compensation they need for medical bills, rehabilitation, lost earning capacity and other costs resulting from the injury. Whether you're seeking compensation through the state workers' compensation system or through a civil claim of negligence, your interests are best protected by having a work injury attorney handle your case while you focus on healing. Too much is at stake to let the insurance company simply have its way.

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