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The Illinois House and Senate have passed SB 1596 and sent it to Governor Pritzker for signature (download PDF here). We believe it is unlikely the Governor will veto this bill. SB 1596 amends the Illinois Workers Compensation Act and Occupational Diseases Act to remove the Act as the exclusive remedy where recovery under the WC/OD Act is barred by the statute of repose.  Preliminarily, we contemplate that this amendment will impact latent injury cases like mesothelioma cases, talc cases, “popcorn lung” cases, silica cases and cases with similar issues.  Under the proposed statute, if a WC claim is precluded by the statute of repose, a civil action can then be brought against the employer in state or federal court.  While a defendant/employer would have other/additional defenses available that would not be available in a WC case, damages would not be capped or limited as they would under the WC/OD Act.

The question then becomes which insurance policy covers this exposure.  The employee exclusion in a company’s general liability policy will continue to apply to preclude coverage.  The exposure will likely be covered under the 1(b) Section of the WC/EL cover and potentially, an umbrella policy.  However, those limits should be revisited by all companies with latent injury cases in order to ensure policy limits are sufficient to cover the increased exposure.

In addition, please click here to read Kevin G. Owens' article about the potential impact of SB 1596 on latent injury cases.