Every employer in the Commonwealth of Massachusetts is required have workers’ compensation insurance or be able prove there are enough funds to qualify as a self-bonded entity with an injury fund. This is usually only the case for state and municipal agencies and does not come up much in the case of private employers.
However, some companies choose to have more than one account instead of paying for high limits on a single policy. These employers have tried to pick and choose which carrier should be liable in the event a worker is injured, but the insurance companies did not like pick and choose approach to dealing with workers’ compensation claims.
A recent news feature in Business Insurance looks at a case from the Massachusetts Supreme Judicial Court (SJC), which is the highest court in our state. This case dealt with an employer that had two workers’ compensation insurance policies. One of the policies was for workers who were injured in the United States, and one company covered all workers who were required to travel outside of the United States and Canada.
In this case, claimant was badly injured in a car crash. His ultimate destination was Oman, a nation on the Arabian Peninsula, but the car crash happened in Massachusetts. The employer believed it had a choice of using either policy, since the employee was on his way out of the country when the accident occurred. The employer filed with the workers’ compensation carrier that handled the claims for employees injured while traveling outside of the Untied States and Canada. The insurance company paid the claim, but later found out about the other workers’ compensation policy with another company that could have handled the claim for this Boston area workers’ compensation matter.
The other insurance company denied the claim and did not want to compensate or reimburse the other carrier for any of the money it spent paying the workers’ compensation claim, because it was not notified of an accident by the employer. Generally, an employee must notify an employer immediately after an accident, so the employer can put the workers’ compensation insurance carrier on notice of a future claim. If this is not done, the company may deny the claim, which is what the company was saying happened in this case.
The first insurance company filed a claim against the second one that refused to pay, and the court held that they were not required to pay the first company, because there was never any notice given as required by the statute. However, the Supreme Judicial Court for Massachusetts ruled that according to the law, an employer with more than one policy cannot pick and choose which one to use and should have notified both carriers. However, since the law also requires both companies to pay their fair share of the workers’ compensation benefits, the fact that there was no notice does not excuse the second company from liability.
It should be noted that if there was an at-fault driver other than employee, the injured worker might have a valid claim with the at-fault driver’s insurance company.
If you or someone you love has been injured in a Boston work accident, call for a free and confidential appointment at 1-888-367-2900.
Employers with multiple comp insurers can’t play favorites, March 9, 2016, Business Insurance, By Sheena Harrison
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