Self-Insurend Retention Must be Paid for Each Occurrence

0
4K

Read the full article at https://lnkd.in/dqxhWcQe and https://zalma.com/blog plus more than 4200 posts.

 

Excess Workers’ Compensation Policy is not a Workers’ Compensation Policy


Posted on May 4, 2022 by Barry Zalma


Neville Chemical Company (“Neville”), appealed from the District Court’s order granting summary judgment to its excess workers’ compensation insurer, TIG because of a failure to meet the self-insured-retention (SIR). In Neville Chemical Company v. TIG Insurance Company, successor-in-interest to Transamerica Insurance Company, No. 21-1616, United States Court of Appeals, Third Circuit (April 26, 2022)

FACTS


Neville, a Pittsburgh hydrocarbon resins manufacturer, maintained a self-insured workers’ compensation program. To supplement this program, Neville purchased a “Specific Excess Workers Compensation Policy” (“Policy”) from TIG. Under this Policy, after Neville provided workers’ compensation benefits up to the Self-Insured Retention (“SIR”) limit of $500,000 per occurrence


The injuries sustained by Lawrence Kelley occurred on three occasions during his employment with Neville.


The term “accident” implies a degree of fortuity as an unexpected and undesirable event, or an event that occurs unexpectedly or unintentionally. The District Court concluded that, in this case, the term “accident” meant a single, finite event of an “unexpected or unforeseen nature.” The TIG policy would only have been triggered if the SIR limit of $500,000 was met as to each occurrence.


Finally, Neville’s argument that the District Court failed to recognize that the Policy must be read to include the Pennsylvania Workers’ Compensation Act concepts of “recurrence” and “aggravation” are irrelevant to this case.


State workers’ compensation regulations do not apply to an excess workers’ compensation policy because an excess policy is not a workers’ compensation policy.


ZALMA OPINION


Excess policies are excess over an SIR. Neville, as self insured, took an injured employee who was entitled to workers’ compensation benefits for three separate and distinct injuries and accumulated them into a single claim and then tried to get the excess insurer relieve Neville of its obligation to its injured employee. The attempt failed because the District Court and the Third Circuit recognized that three separate accidents required three separate funding of the $500,000 SIR.

 

(c) 2022 Barry Zalma & ClaimSchool, Inc.


Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].


Subscribe to Zalma on Insurance at locals.com https://lnkd.in/gn5WAi6C.


Subscribe to Excellence in Claims Handling at https://lnkd.in/gNm9EWKJ.


Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gKCTg53

Sponsored

We are 100% funded for October.

Thanks to everyone who helped out. 🥰

Xephula monthly operating expenses for 2024 - Server: $143/month - Backup Software: $6/month - Object Storage: $6/month - SMTP Service: $10/month - Stripe Processing Fees: ~$10/month - Total: $175/month

Xephula Funding Meter

Please Donate Here

Search
Categories
Read More
Other
You Win Some, You Lose Som
You Win Some, You Lose Some Read the full article at https://lnkd.in/gXR3-NGT and see the full...
By Barry Zalma 2023-09-22 12:49:56 0 3K
Other
Insurance as a Necessity
HOW THE LAW OF UNINTENDED CONSEQUENCES COSTS THE INSURANCE INDUSTRYRead the full article at...
By Barry Zalma 2022-05-30 13:32:56 0 3K
Other
Fictionalized True Crime Insurance Fraud Books
Fictionalized True Insurance Crime Books Read the full article at...
By Barry Zalma 2020-10-19 16:35:46 0 4K
Politics
Please sign the petition to stop the resume of the Federal Executions planned by the Trump Administration, thanks!
Only God should have the right to give or take life IMHO, NOT the (zionist) Trump...
By Medic Ineman9 2020-06-19 20:42:55 0 6K