The employer is guilty of Serious and Willful Misconduct, what percentage should you increase reserves by if the employee has lost both hands?

• A. 10%
• B. 20%
• C. 50%
• D. 70%

Answer: (C)

When an employer is found guilty of Serious and Willful Misconduct, especially in a case where an employee has suffered a catastrophic injury such as the loss of both hands, a significant increase in reserves is warranted. This is because Serious and Willful Misconduct indicates a higher degree of negligence or intentional disregard for employee safety, which results in intensified liability.

In this scenario, the situation is dire, and the potential for substantial damages, including compensation for medical expenses, loss of earning capacity, and permanent disability benefits, is elevated. Typically, increases in reserves can be substantial to reflect the long-term implications of such a severe injury, both from a financial and legal standpoint.

In this context, a 50% increase in reserves is a common regulatory backlash to account for the compounded liabilities resulting from the employer's actions. This higher percentage ensures that the associated costs of rehabilitation, ongoing care, and potential litigation are adequately covered, providing a safeguard for both the injured employee and the employer's financial responsibilities.