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Court says insurer has no duty to defend worker death claim
A federal appeals court held paired exclusions, workers comp law and intentional acts, barred defense and coverage for a workplace death at the insured's Indiana facility.
A federal appeals court ruled that an insurer does not have to defend an Indiana employer in a wrongful death lawsuit tied to a worker's death, finding the policy’s exclusions left no path to coverage.
According to Insurance Business, the US Court of Appeals for the Seventh Circuit affirmed that Insurance Company of the West (ICW) owed High Performance Alloys, Inc. (HPA) no duty to defend or provide coverage under a Worker's Compensation and Employers' Liability policy in force from October 1, 2021 to October 1, 2022.
The estate alleged the worker died at HPA’s facility and brought a wrongful death case in state court that remains open. The policy covered bodily injury by accident, but excluded obligations imposed by workers compensation law and bodily injury intentionally caused or aggravated by the insured.
The court said the allegations created a bind for HPA, because if the company intended the death, the intentional-acts exclusion applied, and if it did not, the death still qualified as an “accident” that the workers compensation law exclusion also barred. It declined HPA’s request to send the question to the Indiana Supreme Court, noting Indiana precedent already addressed the intent issue, and highlighted that the combination of these exclusions can strand policyholders when workplace deaths lead to litigation.