We’re continuing our discussion of the recent Florida Supreme Court decision regarding workers’ compensation insurance. An employee was killed on the job, and his widow received a settlement under the employer’s workers’ comp insurance as well as a $9.5 million damage award in a wrongful death lawsuit. The employer’s insurance company refused to pay the damage award from the lawsuit.
Because the workers’ compensation system is so closely tied to state law, it is easy to forget that workers’ comp is not a government program. It is private insurance. The state requires that employers, both public and private, purchase the coverage, with a few exceptions, but companies need to shop around and buy the coverage the same way we shop around for auto insurance.
Workers’ comp policies include two kinds of coverage: workers’ comp and employer’s liability. Most people understand that workers’ comp covers the costs of work-related injuries and illnesses regardless of fault. There are a few exceptions for some claims, the same types of claims other insurance does not cover, including intentional or illegal acts. For the most part, state law dictates what is and what is not compensable.
Employer’s liability insurance is often referred to as a “gap-filler” — the policy kicks in when a claim is not covered by workers’ comp. With this coverage, the state does not define the covered acts, the insurance policy does.
In the case we’ve been discussing, the employer would have submitted the wrongful death award to its insurance company under its employer’s liability coverage. Why wouldn’t it be a workers’ comp claim? The worker was killed in a work-related accident, but the worker is not suing: His wife is.
The answer to the question in the title is, then, “Sort of.” The worker cannot sue, because workers’ comp is the exclusive remedy, but a third party, including a relative, can sue.
That’s not quite the end of the story, though. We’ll finish up in our next post.
Business Insurance, “Florida workers comp exclusive remedy rule bars wrongful death payout to family,” Sheena Harrison, Dec. 5, 2014
Morales v. Zenith Ins. Co., No. SC13-696, 2014 WL 6836320 (Fla. Dec. 4, 2014), via WestlawNextShare