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The True Costs for Self-Insured Business Automobile Exposures

By January 12, 2012August 22nd, 2018

Below is an important article about a recent court case in which the New York State of Appeals ruled that a self-insured employer has the same obligations for Workers’ Compensation as an insured employer. We encourage you to read this brief case and contact an insurance professional at The Flanders Group if you have any questions or wish to discuss this issue further.

New York Court of Appeals rules self-insured employer may be liable for UM benefits [Lawyers USA]

Workers’ compensation exclusivity does not bar a self-insured employer’s liability for uninsured motorist benefits claimed by an employee injured in an automobile accident, New York’s highest court has ruled in affirming judgment.

The plaintiff was an employee of the defendant. He suffered injuries in an accident with an uninsured driver while driving a company car in the course of his employment.

The defendant was a self-insured employer that, as allowed by state motor vehicle insurance law, had not obtained an insurance policy to cover the car the plaintiff was driving. Under state precedent, a self-insurer has the same liability for uninsured motorist coverage that an insurance company would have.

In addition to seeking workers’ compensation benefits for his injuries, the plaintiff sought uninsured motorist benefits from the defendant.

The employer argued that such a claim was barred by the exclusive remedies provisions of the state’s workers’ compensation law.

The court disagreed, explaining that an “action against a self- insurer to enforce the liability recognized [under state precedent] is, in our view, essentially contractual. The situation is as though the employer had written an insurance policy to itself, including the statutorily-required provision for uninsured motorist coverage. This action is therefore not barred by [workers’ compensation exclusivity].”

New York Court of Appeals. In re Elrac, Inc. v. Exum, No. 230. Dec. 13, 2011. Lawyers USA No. 993-3430.
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