AIG systematically denies claims of injured US contractors


(RAW STORY)   Insurance giant AIG is already in trouble with the taxpayers from whom it has received billions in bailout money. Now an investigation by ABC News, the Los Angeles Times, and the non-profit Pro Publica has found that AIG has been ripping off its own insurance customers as well.

According to ABC’s Brian Ross, “AIG covers about 90% of the people who get hurt working overseas for American defense contractors.” Pro Publica analyzed 30,000 of those cases and found that, although minor injuries were covered without question, AIG had challenged an astonishing 43% of the more serious claims.

ABC reported on several of the most outrageous cases, including that of a blind amputee for whom AIG has refused to buy a new artificial leg. John Woodson, who was formerly a truck driver with Halliburton spin-off KBR, complained bitterly, “You have to ask a second time, a third time, a fourth time, and you’re still not getting it.”

AIG has refused to divulge how much it is making on insuring private defense contractors at the expense of US taxpayers, but according to Pro Publica, it is the major player in a system which Congressional investigators found has earned nearly $600 million in profits out of $1.5 billion in premiums. A military audit described AIG’s premiums as “unreasonably high.”

Houston attorney Toby Cole, who represents many of the injured contractors, told ABC, “It’s difficult for me to think it’s anything but a concentrated effort just to ignore these guys.”

Kevin Smith, another former KBR truck driver who was badly injured in Iraq, told ABC that AIG had refused to pay for surgery on his injured knee without even offering any explanation. At one point, AIG cut off all of his medical benefits until compelled by a federal judge to resume payments. “I can’t even begin to say how angry I am,” Smith told ABC. “They can’t pay my doctor $13,000?”

The full ABC story is available here. The Los Angeles Times story is available here. Pro Publica’s version can be read here.

2 Responses to AIG systematically denies claims of injured US contractors

  • The taxpayer also pays the inflated premiums on these Defense Base Act policies to AIG and CNA. They are cost reimbursable under the US Government Contracts. They get to keep the premiums, then get reimbursed for the War related claims plus a 15% administrative fee by the taxpayer under the War Hazards Act.

    The Department of Labor is the administrator of the Defense Base Act.
    Look to them for the lack of oversight and allowing this abuse of the injured contractor and their families.

    Thanks T Miller and your helpers for your years of working for the injured contractor.

    Lots more on injured contractors at

  • I worked with the Iraq Oversight committee for the Defense Base Act with Henrey Waxman on this. The lack of oversight is crazy, but not much more then what we see here in the states I’ve now come to realize. Even the verterans have been fighting for medical care. And then came the AIG bailouts! Wow what a low blow to many American who were injured while supporting our military on Operation Iraqi Freedom! Sad part is, many of the American Contractors who work as civilian contracors in Iraq and Afghanistan are military veterans, some go as far back at Vietnam, other Desert Storm and today Iraq Veterans. Many of these Veterans who are now working as civilians fall under Priority 7 & 8 (non-service related injures) Check out "Other Sons and Daughter" written by a civilian contractor who was injured while overseas in Iraq who was a prior military veteran.

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