A flood of claims from the World Trade Center attack could drive up the already high cost of workers’ compensation insurance in New York state, according to industry experts.
Workers’ compensation is a state-regulated business. Rates are set based on the claims experience of companies within each state, meaning Western New York companies will feel the market impact of the tragedy hitting in New York City.
Thousands of workers from the World Trade Center–about 50,000 people worked in the twin towers–and neighboring buildings are expected to receive benefits to treat physical and emotional injuries suffered during the horrific Sept. 11 attack.
“That particular area of the property and casualty market in New York was weak to begin with. You were probably going to see higher (worker’s compensation) premiums anyway,” said David Lackey, president of Weiss Ratings, an independent organization that rates the financial strength of insurance companies.
Martin Heagen, vice president and actuary of the Manhattan-based New York Compensation Insurance Rating Board, said it is too early to begin gauging the impact. “We don’t know what the liability is yet. We can’t even get a handle on the number of physical injury cases we’ve got out there yet,” he said.
Property claims alone could surpass the 1992 damage of Hurricane Andrew, which ranks as the most expensive national disaster at $15.4 billion.
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JWThompson@tribune.com
