Google Screened

Pennsylvania Court Denies Insurance Policy Exclusion for Workers’ Compensation Recipients

In October 2011, the Supreme Court of Pennsylvania issued an opinion in a case that dealt with the interaction between Workers’ Compensation benefits and auto insurance. The court’s decision in the case has important implications for others who sustain injuries as a result of workplace accidents or hazards.

Details of the Case

In 2002, Frank Heller was working as a police officer in Sugarcreek, PA when a driver smashed his vehicle into Heller’s patrol car. Heller sustained severe injuries. He received Workers’ Compensation benefits in the amount of two-thirds of his wages and medical expenses from the Workers’ Compensation insurer while he recovered from his injuries. Sugarcreek borough paid the remainder of his salary.

Heller received $25,000 from the at-fault driver’s insurance company, but his damages from the accident far exceeded that amount. He made a claim for $100,000 under the underinsured motorist provision of his employer’s insurance company, Pennsylvania Pooled Risk Insurance for Municipal Entities (Penn PRIME). Penn PRIME denied the claim due to a provision in its policy that does not allow for payment to those who qualify for Workers’ Compensation benefits for their injuries.

The Court’s Decision

The court held that Penn PRIME’s exclusion violated public policy. The insurance policy was employer-sponsored, so almost everyone making a claim under the policy would be doing so for on-the-job injuries and, therefore, be eligible for Workers’ Compensation benefits. The court called the coverage “illusory” and noted that Penn PRIME received a windfall by charging premiums for coverage it never intended to offer.

State law requires that the burden of payment for injuries by a third-party tortfeasor rest on either the person who caused the injuries or the uninsured/underinsured motorist insurer – not the Workers’ Compensation insurer. By offering only illusory coverage, Penn PRIME was improperly placing the responsibility of compensating injuries on the workers’ compensation insurer.

Implications of the Decision

The court’s decision in this case affects those who are injured at their jobs as a result of the actions of third parties. The court reaffirmed the legislature’s intent to allow employees to seek full recovery for injuries that they sustain on the job which are the result of someone else’s negligent actions, rather than dangers inherent in the work.

Workers’ Compensation benefits generally do not completely cover the damages that an employee might suffer when a workplace injury is caused by a third party, and employees deserve the opportunity to collect compensation from either the person who caused the injury or any insurance that the employee has in addition to workers’ compensation.

Philadelphia Workers’ Compensation Lawyers at McCann Dillon Jaffe & Lamb, LLC Help Injured Workers Pursue Justice and Compensation

If you have been injured while on the job, contact an experienced Philadelphia Workers’ Compensation lawyer who can discuss your situation with you and help you get the benefits you need in order to heal. Call the legal team at McCann Dillon Jaffe & Lamb, LLC today at 215-569-8488 or contact us online.  We help injured workers throughout Pennsylvania, Delaware and New Jersey.