The Issue of Coverage is not for Arbitration
In Travelers Property Cas. Co. of America v. The Illinois Workers’ Compensation Commission, Brian Smith was an independent truck driver who was injured while working for himself. Smith filed an application for adjustment of claims under the Workers’ Compensation Act, naming himself as the employer. Travelers Property Casualty Company of America (Travelers) had issued the claimant a workers’ compensation insurance policy, but denied coverage. Travelers asserted that the policy excluded coverage for workers’ compensation claims made by the claimant. Smith’s workers’ compensation case was scheduled for an arbitration hearing. Prior to the arbitration hearing, Travelers filed a motion to intervene in the workers’ compensation proceeding. In its motion, Travelers alleged that the claimant’s lawsuit pending in the circuit court was related to the work accident and his workers’ compensation insurance coverage. It requested the arbitrator not to hold the arbitration hearing and defer to the circuit court or, alternatively, to allow it to intervene.
The arbitrator denied Traveler’s motion to intervene and noted that whether there was insurance coverage was not an issue to be addressed in arbitration. The issue of coverage was a contractual issue that was for the circuit court to decide. At the conclusion of the arbitration hearing the arbitrator found that Smith had sustained injuries as a result of a workplace accident and awarded him benefits under the Act. Travelers filed a petition to review the arbitrator’s decision with the Illinois Workers’ Compensation Commission. Travelers alleged that it was seeking review as “a proposed intervening respondent.” Smith moved to dismiss Travelers petition, and the Commission granted the motion to dismiss ruling that Travelers had not standing.
The court reviewed whether Traveler’s had standing to seek a review of the Workers’ Compensation Commission’s decision. The court held that Travelers was not a party to the workers’ compensation claim. Smith could have named Travelers as an additional respondent, but he was not required to do so. Travelers could have filed a special and limited appearance and defend the claim under a reservation of rights, but opted not to do so. Nothing in the Act grants it a right to intervene in the arbitration hearing or proceeding before the Commission. Therefore, it has not standing to obtain a review of the decision.
Travelers Property Cas. Co. of America v. The Illinois Workers’ Compensation Commission 2013 WL 4502822 (Ill.App. 5 Dist.) (This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(3)(1)).
