A federal appeals court upheld the district court’s grant of summary judgement for Employers Preferred Insurance Co., who asked for a judgment on whether Hartford Accident and Indemnity Co. was bound to pay half of a workers’ compensation claim when it was discovered that an employer had two policies with the two companies. The court held that Hartford should pay half, their defense that they cancelled the policy was void because they cancelled the policy after a claim arose.
The owners of Hoeckele’s Bakery bought a workers’ compensation policy in July of 2013. They had an existing policy with Hartford, and Angela Hoeckele completed a renewal application and paid the premium for the policy to run until July of 2014. A few weeks later, Paul Hoeckele applied and paid the premium to Employers for a policy running July 2013 to July 2014. It was a mistake on their end that resulted in two workers’ compensation policies.
They in May of 2014 a delivery driver died in an accident, and his widow sought benefits. Employers paid and then asked the Hartford to pay half the costs. Hartford declined to pay, and Employers brought an action. When Paul Hoeckele discovered that the Hartford policy was active after the accident, he was confused and thought the premium had never been paid. He filed for a cancellation request in July of 2014. The Hartford retroactively cancelled the policy which was issued July 20, 2013 and gave them a full refund on their premium.
Both policies contained language guaranteeing an equal division of costs in the event of concurrent coverage.
Missouri laws bar Hartford from cancelling a policy after their insured entity became liable for a workers’ comp claim, so that cancellation was void. The Hartford also argued that there was a mutual mistake in covering the bakery, since they already had coverage, and their policy would fall under a state law which describes agreements like that as “no real agreement is formed”. The court said the mistake was on the part of the employer and not on the part of the Hartford so they couldn’t use that argument.
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