Worker’s Compensation Policy Covering Uninsured Motorists
An employer had a workers’ compensation policy and uninsured motorist coverage through its motor vehicle insurance policy, which contained a limitation provision providing that the insurer would “not pay for any element of ‘loss’ if a person is entitled to receive payment for the same element of ‘loss’ under any workers’ compensation .” The collateral source rule provides that benefits or payments an injured party receives from a source independent of the tortfeasor will not be credited towards the tortfeasor’s liability. The limitation is in place to prevent a windfall of compensation and not allow the insured to receive duplicate benefits for the same claims.
After an employee, Burcham, was injured in a car crash while in the scope of employment, he filed a declaratory action that he was entitled to compensation under his uninsured motorist coverage with defendant, West Bend Mutual Insurance Company, for (1) disfigurement resulting from the injuries; (2) loss of a normal life experienced and reasonably certain to be experienced in the future; (3) increased risk of future harm resulting from the injuries; (4) pain and suffering experienced and reasonably certain to be experienced in the future; (5) the reasonable expense of medical care received and the present cash value of treatment reasonably certain to be received in the future; and (6) the value of earnings and benefits lost and the present cash value of those reasonably certain to be lost in the future, and that these elements of loss would not be duplicative payments for the same elements of loss compensated under his workers’ compensation claim.
The employee was not automatically entitled to benefits under workers’ compensation for disfigurement since it would be negated if granted under a separate section of the coverage. The Court therefore held that the employee was allowed to seek, within the arbitration, compensation for disfigurement not awarded in the workers’ compensation claim.
The Court next held that since workers’ compensation covered various forms of disability, and disability is equivalent to the loss of a normal life “element of loss”, that the employee could not seek compensation under uninsured coverage for loss of a normal life. They were essentially the same thing. The court also held that the employee could not claim any medical expenses in his arbitration for uninsured motorist coverage because the plaintiff was entitled to receive payment for medical expenses under workers’ compensation and therefore it was an “element of loss”, regardless of the difference between the billed rate and the amount paid.
Finally, the Court held that the employee could not seek loss of earnings from the uninsured motorist coverage since that category of loss was an “element of loss”, regardless of the dollar amount or difference between how much income he actually lost and how much workers’ compensation gives him for loss of earnings. Burcham is receiving payment for lost earnings under workers compensation and therefore may not seek such damages in arbitration.
Burcham v.West Bend Mut. Ins. Co., 2011 IL App (2d) 101035, 961 N.E.2d 453 Ill. App 2 Dist., 2011
