PROVIDENCE — A federal court has determined that an individual injured while driving a company car might be eligible for underinsured motorist benefits under her employer’s commercial auto policy, despite having already recovered workers’ compensation benefits.
Those two SJC cases were guided by the Massachusetts court’s concern with providing a “predictable and reliable scheme” for the interworkings of workers’ compensation and UIM coverage, noted the First Circuit Court, given that both cases concerned Massachusetts companies with Massachusetts policies, doing business in that state.
question of whether the underinsurance coverage purchased by Safety was indeed a bargained-for provision intended to provide Safety’s employees with additional protection from damages caused by underinsured motorists,” said the First Circuit.
In the case of Baker V. St. Paul Travelers, a Rhode Island resident, Heidi M. Baker, was seriously injured in Massachusetts while driving a car owned by her employer, Safety Source Northeast. The accident was not her fault and she was driving the car as part of her job duties. The at-fault driver’s insurance was insufficient to cover Baker’s damages. She also filed for and received workers’ compensation benefits.
However, the Court noted that National Union created an exception to the general exclusivity provision, to specifically allow for injured workers to retrieve coverage that their employer bought for the express purpose of providing UIM coverage.
Baker’s employer Safety had UIM limits of $100,000/$300,000 and paid a premium of $79 for that coverage. The Court cited the Massachusetts commercial auto manual which indicated that Safety’s coverage might have been over and above what insurers were required to offer commercial auto insureds and Safety might have indeed “bargained for” this coverage.
The District Court ignored this language, observed the First Circuit.
Baker then turned to the UIM provision of her employer’s commercial auto policy, written by St. Paul Travelers. St. Paul denied the claim, citing a Massachusetts law that prohibits employees from recovering both workers’ compensation and the pertinent UIM coverage for a work-related injury.
“Therefore it did not reach the factual
The Court sent the case back to the
lower court to determine Baker’s true
eligiblity for the UIM coverage. ■
Rhode Island District Court agreed with St. Paul Travelers, granting summary judgment to the insurer.
Baker objected to the ruling, asserting that Rhode Island law should apply to the case. She also argued that even under Massachusetts law, the prohibition on recovery of both should not apply, because the UIM coverage was a “bargained-for provision.” The case was then appealed to the federal First Circuit Court of Appeals, which disagreed with the conclusions reached by the lower court.
The Court opted to apply Massachusetts law to the case, and cited the district court’s decision to use two Massachusetts Supreme Judicial Court decisions to block Baker’s claim (Berger v. H.P. Hood, 1993, and National Union Fire Insurance v. Figaratto, 1996).
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