A recent ruling by the Massachusetts Supreme Court, while dealing with a dispute between how workers’ comp co-insurers pay out claims in situations where not all insurers were provided claim notification has positive implications for injured workers.
The ruling held that employers are not allowed to select which insurance carriers will be responsible for paying an injured worker’s claim, and that co-insurers are not exempt from the obligation to provide coverage simply because they haven’t been notified of a claim.
The ruling was based on a case involving an employer which held two primary workers’ compensation policies, one from the Insurance Company of the State of Pennsylvania which covered the company’s workers in the United States, and another from Great Northern Insurance Co., which covered workers who were injured while travelling outside the United States and Canada. The employer initially only notified the former insurance carrier of the injured employee’s claim, and the carrier later sought to have the other company involved in the claim.
As we noted above, the dispute was ultimately resolved in favor of the insurance carrier that had initially received notice of the injured employee’s claim, such that the other insurance carrier was deemed to be responsible for providing coverage along with its co-insurer. The rationale from the Massachusetts Supreme Court was that policyholders are not able to elect which of their insurers defend and indemnify a claim by withholding notification to other primary insurers. Put another way, the fact that some co-insurers are not notified of a claim does not eliminate their obligation to help cover the claim.
In our next post, we’ll continue looking at the ruling and its implications for injured workers.