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Tuesday, May 04, 2010

Ind. Decisions - "Supreme Court Sides With Insureds in Farm Liability Dispute"

The Supreme Court's decision April 29th in the case of Everett Cash Mutual Insurance Company v. Rick Taylor and Katrina Taylor (ILB summary here) is the subject today of a story in Claims Journal. It concludes:

The Supreme Court rejected Everett Cash's argument that the Taylors' claim was not for an "occurrence" as defined in the policy, stating that the claim was "filed as a result of an 'accident' in which he suffered bodily injury and incurred medical expenses. This was an occurrence within the meaning of the policy."

The court reasoned that the exemption in the Everett Cash policy "simply clarifies that the policy provides no coverage in the conventional workers' compensation context." Everett Cash doesn't provide workers' comp policies, and the Taylors had no employees at the time they purchased their policy.

"It would be beyond the ordinary understanding of the workers' compensation system to extend the exclusion to the matter-of-first-impression scenario here – where a claim is filed against an insured by an injured worker in the employ of a third party who did not comply with its obligations under the Act," the Court explained.

"Given that the Taylors could not have even purchased workers' compensation insurance to protect themselves from claims by Sherlocks' employees, it is hard to imagine them thinking that an exclusion regarding workers' compensation could preclude them from having protection from a lawsuit by someone injured in an accident on their property."

The Court also pointed out that the exclusion was written ambiguously enough that apparently Everett Cash's own agent thought coverage would be provided in this case.

"We hold that for an insurance policy to exclude such a claim, any exclusion must be more explicit than the language used here," the Court said.

The Court's decision was written by Justice Sullivan.

Posted by Marcia Oddi on May 4, 2010 02:59 PM
Posted to Ind. Sup.Ct. Decisions