Orlando, Fla.-Workers' compensation insurers must plan to be proactive if a terrorist attack occurs and could pool a coverage arrangement if it has a government backstop, speakers at an industry conference here said yesterday.

Their assessments were offered at the 60th Annual Workers' Compensation Educational Conference, a partnership of the Florida Workers' Compensation Institute and The National Underwriter Company.

Carl J. Mussenden, vice president, workers claims for CNA, said roles for claims departments are changing when it comes to dealing with injuries stemming from a terrorist event.

Rather than waiting for claims to arrive, he said, companies need to develop a preparedness plan to rush crisis intervention services to the scene of an attack.

Companies should be ready with key specialists, social workers and mental health workers to meet survivors, because getting to the scene early "can have a huge impact," he said.

Mr. Mussenden discussed a variety of hypothetical comp claims that could result from a terrorist attack--some with physical injuries and all including post traumatic stress disorder.

Just one case involving a worker suffering solely from PTSD could reach annual costs of $5,200 in treatment. Individually, he said, this might be a manageable claim, but in a terrorist attack 200 workers could suffer a similar injury.

Alejandra Nolibos, a consultant with Towers Perrin Tillinghast, discussed results of a terror reinsurance pool feasibility study done for 14 comp insurers in 2003.

The group that sought the study decided not to further pursue it because of findings that the pool could not offer capacity to help the industry absorb losses. Ms. Nolibos said the study concluded that the pool "could not assume mega terrorism events."

By the consultants' estimates, comp insurance is a $30 billion industry, and some models for terror events project they could inflict a workers' comp loss of $90 billion or more.

Even funding at an aggressive rate, the study found it would take years to build enough capital to provide for even a "moderate" terrorist event.

Special Reports /

Expert: Plan Now For WC Terror Claims

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