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Court rules insurer need not defend Indiana employer in worker death suit
The Seventh Circuit found two policy exclusions together foreclosed both coverage and a defense, because the death could be treated as either an intentional act or an event barred under the workers compensation carveout.
Insurance Business reports that a federal appeals court ruled an insurer does not have to defend an Indiana employer against a wrongful death claim tied to the workplace death of an employee. According to the US Court of Appeals for the Seventh Circuit, Insurance Company of the West, or ICW, owes no defense or coverage to High Performance Alloys, Inc. in litigation stemming from the death of a worker at HPA's facility during the policy period from October 1, 2021 to October 1, 2022, under a Worker's Compensation and Employers' Liability policy.
The policy covered bodily injury by accident, but it excluded any obligations imposed by workers compensation law and also excluded bodily injury intentionally caused or aggravated by the policyholder. The estate alleged that HPA knew its equipment was dangerous, disregarded warnings, and left known hazards unfixed, pointing to an Indiana Occupational and Safety Health Administration violation over ineffectively guarded equipment and alleging HPA acted with actual intent to cause injury.
The court said HPA could not find a coverage path, because if HPA intended the death, the intentional-acts exclusion applied, and if it did not, the death was still treated as an accident that fell within the workers compensation act exclusion. The judges declined HPA's request to send the issue to the Indiana Supreme Court, citing existing Indiana precedent, and noted that paired workers compensation and intentional-acts exclusions can leave policyholders without coverage when workplace deaths end up in court.