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AIG/AIU Insurance Co. v. South Akers Mining Co.11/24/2004
of the legislature."
Looking at the plain meaning of KRS 342.165, we believe the purpose of the statute is to provide increased compensation for employees who are injured as a result of their employer's intentional violation of a safety regulation. The object of workers' compensation law is clear, as is the goal of requiring employers to obtain workers' compensation insurance. Injured employees are to be compensated without fear that the liable employer will be financially unable to provide an adequate remedy. The legislature intended it to be so, and we are not compelled to interpret the language of KRS 342.165 any other way.
While we acknowledge that the consequence of the 15 percent increase may be to penalize the employer or the insurance carrier, the language of the statute indicates that the increase is to be applied to compensate employees for benefits "for which the employer would otherwise have been liable." Therefore, we hold that the 15 percent increase is "compensation" for which AIG, as the workers compensation carrier for South Akers, is responsible.
Finally, AIG argues that the 15 percent increase in KRS 342.165 is equivalent to punitive damages; and therefore, it should not be held liable. Again, we disagree.
Punitive damages are those damages "awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit." The purpose of punitive damages is generally to deter blameworthy conduct.
Though we agree that the result of the 15 percent increase may be to deter conduct on the part of the employer, there is nothing in the language of KRS 342.165 to indicate that the legislature intended for the increase in compensation to be punitive in nature. Unlike other statutes where punitive damages are explicitly mentioned, KRS 342.165 refers to the 15 percent increase only in terms of compensation. Therefore, we do not believe the 15 percent increase in compensation is akin to punitive damages.
For these reasons, we conclude that AIG is liable for the 15 percent increase in compensation incurred as a result of South Akers's violation of the law. So, we affirm the decision of the Workers' Compensation Board.
ALL CONCUR.
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