If you own or manage a business and one of your employees has been diagnosed with mesothelioma or another asbestos-related illness, you may be facing questions you never anticipated. Two of the most common compensation systems that come into play in these situations are workers’ compensation and asbestos trust funds. Understanding how they differ, how they interact, and what your obligations are as an employer can help you navigate a complicated legal and financial landscape.
What Workers’ Compensation Covers
Workers’ compensation is a state-mandated insurance program that provides benefits to employees who suffer work-related injuries or illnesses. In theory, it sounds like the right fit for an employee diagnosed with mesothelioma after years of on-the-job asbestos exposure. In practice, it is often just one piece of a much larger puzzle.
Workers’ comp benefits typically cover medical expenses, a portion of lost wages, and disability payments. The tradeoff for employees is that by accepting workers’ comp benefits, they generally give up the right to sue their employer directly for negligence. For business owners, this can offer some protection from litigation, but it does not eliminate all exposure to legal liability.
One important limitation of workers’ compensation in asbestos cases is that the illness may have developed over decades, sometimes long after an employee left your company. Many states have specific statutes of limitations and discovery rules that govern when the clock starts ticking on an asbestos-related claim. This can create complicated questions about which employer, or employers, bear responsibility for benefits.
What Are Asbestos Trust Funds?
Asbestos trust funds were created through bankruptcy proceedings involving companies that manufactured or distributed asbestos-containing products. When these companies could no longer sustain the volume of lawsuits being filed against them, courts required them to set aside significant sums of money into dedicated trusts. Today, more than 60 active trusts collectively hold an estimated $30 billion to compensate current and future claimants.
Critically, these funds are separate from workers’ compensation. An employee with mesothelioma may be eligible to file claims against multiple asbestos trust funds in addition to filing a workers’ comp claim. These are not mutually exclusive, and pursuing one does not automatically disqualify a person from pursuing the other.
For business owners, this distinction matters for several reasons. If your business used products made by companies that have since established asbestos trusts, your employee may have a direct path to compensation that does not involve your company at all. An experienced mesothelioma attorney can identify which trust funds may apply based on the specific products and job sites involved.
How the Two Systems Interact
The relationship between workers’ compensation and asbestos trust fund claims varies by state. In some jurisdictions, money received from a trust fund claim may be offset against a workers’ comp award, meaning the total payout could be adjusted to prevent what regulators consider a double recovery. In other states, the two systems operate more independently.
Business owners should also be aware that in states where employees are permitted to pursue both a workers’ comp claim and a civil lawsuit against third parties, any money recovered from an asbestos trust fund might be factored into how damages are calculated. This is another reason why having qualified legal counsel involved early is important, both for the employee and for the employer.
Employer Liability Beyond Workers’ Compensation
Workers’ compensation is not always the end of the story for employers. In some cases, employees or their families may argue that the employer’s conduct was so reckless or egregious that it falls outside the typical protections of the workers’ comp system. This is a high bar to clear, but it is not unheard of in asbestos litigation.
Additionally, third-party claims can loop back to affect a business indirectly. If your company is named in litigation because you used a particular asbestos-containing product on a job site, and that product manufacturer had already established a trust fund, the legal maneuvering can become quite involved. Your attorneys will need to coordinate with the claimant’s legal team to sort out responsibility and potential offsets.
Steps Business Owners Should Take
If you become aware that a current or former employee has been diagnosed with an asbestos-related illness, there are several steps worth taking promptly. First, contact your workers’ compensation insurance carrier and notify them of the potential claim. Second, gather documentation related to any asbestos-containing products your company used, when they were used, and under what conditions. Third, consult with an attorney who has experience in occupational disease and asbestos liability.
Keeping thorough records is especially valuable in asbestos cases because of the long latency period. A diagnosis today may trace back to exposures from 20 or 30 years ago, and documentation from that era can be critical to determining liability and routing claims to the appropriate sources of compensation.
Understanding both systems, workers’ compensation and asbestos trust funds, puts you in a stronger position to respond appropriately, protect your business, and ensure that affected employees or their families get the help they need.
