Case name: Franklin v. Superior Casting, et al., No. SC 18501 (Conn. 08/30/11).
Ruling: The Connecticut Supreme Court held that the insurance guarantee association was liable for an insolvent last insurer's obligations to provide benefits to a worker.
What it means: In Connecticut, the insurance guarantee association may be liable for an insolvent last insurer's obligations to pay benefits to an injured worker when there is no overlapping coverage.
Summary: A worker was diagnosed with silicosis, caused by breathing in sand dust and chemical fumes while working. The worker was unable to work and had a 40 percent permanent partial impairment to his lungs. He sought workers' compensation benefits, alleging an occupational disease caused by repetitive trauma. During the course of his employment, his employer was covered by two insurers. The second insurer became insolvent, so the insurance guarantee association became liable for its obligations. The Connecticut Supreme Court held that the association was liable for the worker's benefits but was entitled to reimbursement from the first insurer.
State law requires the last insurer on a risk which other insurers also bear liability to incur initial liability for payment to an injured worker with the right to recover reimbursement from the other insurers. The court explained that the last insurer in this case would have been obligated to pay the worker's benefits if it had not been insolvent. The court said that the worker's requirement to exhaust his claims with other insurers covering the same claim was not intended to fully negate the association's liability.
The court also concluded that there was no duplication or overlapping of coverage. The association was entitled to reimbursement from the first insurer for its proportionate share. The court said the legislature intended the association to share liability for workers' compensation claims. There was no obligation to shift the initial liability to the solvent insurer.
Read more at the WorkersComp Forum homepage.
October 10, 2011
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