Vasquez v. American Cas. Co. of Reading – Eligibility for Employer’s UIM Coverage

Workers’ compensation benefits provide immediate relief for workers injured – or family members of those killed – by covering the cost of medical bills and a portion of lost wages. However, workers should not hesitate to explore all their legal options. This is especially true for family members of those who are killed at work. Such a devastating loss can leave the whole family reeling, but it’s important to secure future financial stability. steel tube

These other options can include:

  • Personal uninsured/underinsured motorist (UM/UIM) benefits;
  • Third-party litigation (i.e., product liability, building owner liability, negligent driver liability, etc.); and
  • Life insurance.

It might in some cases also include coverage from an employer’s UM/UIM policy. The question of eligibility under this provision was raised in Vasquez v. American Cas. Co. of Reading, recently before the New Mexico Supreme Court. Specifically, the question was whether there was a discontinuity between the language in the state’s uninsured motorist statute and the workers’ compensation act.

The workers’ compensation act provides an exclusive remedy for an employee injured at work, so the question was whether the employee could legally recover damages from an employer’s UM policy when the driver was a negligent co-worker. The court answered that he could not.

According to court records, the decedent was killed at work when he was struck by a steel beam that fell from a forklift at a local wrecking and salvage yard. A co-worker was operating the forklift, which belonged to the employer, and he hopped out of his seat to make sure the beam was secure. He left the lift unattended, and as a result, the beam slid off the forks, hitting and killing the decedent.

The plaintiff, as the representative of the decedent’s estate, collected workers’ compensation benefits. The plaintiff also collected damages from the decedent’s own UM/UIM policy. But the issue was whether the plaintiff was legally entitled to collect UM/UIM benefits from his employer’s insurance carrier.

Generally speaking, had the worker been injured in an accident with a third party, his family might well have been entitled to additional coverage, although it might have been reduced to some degree by whatever amount the plaintiff received from workers’ compensation. However, UM/UIM benefits only kick in when a party is liable for damages and either doesn’t have insurance or doesn’t have enough insurance to cover it all. Workers’ compensation laws in all states contain an exclusivity provision, which typically prohibits workers from suing their own employer for negligence that causes work accidents. Generally, co-workers are protected by these laws.

What that meant for this case was that since the exclusivity provisions of the workers’ compensation law prohibited the co-worker from being found liable for the decedent’s death, the employer’s UM/UIM carrier couldn’t be held liable either. Initially, the trial court granted the worker UM/UIM benefits from the employer’s insurer, but it later reconsidered that initial order, based on the fact that the accident that caused the decedent’s death was caused by his co-worker, rather than some third party. The New Mexico Supreme Court affirmed.

Although the decision doesn’t have a direct impact on injured workers in North Carolina, it’s worth noting that when such issues arise before state high courts, justices will often look to courts that have wrestled with similar issues.

Contact the Carolina workers’ compensation lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Vasquez v. American Cas. Co. of Reading, Oct. 13, 2016, New Mexico Supreme Court

More Blog Entries:

U.S. Labor Department: Federal Oversight of State Workers’ Compensation Programs May Benefit Workers, Oct. 12, 2016, North Carolina Workers’ Compensation Lawyer Blog

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