INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Insured just didn’t understand intentions
Insured just didn’t understand intentions
Elliott Sullivan, an employee of High Performance Alloys, Inc. (HPA), lost his life while performing his work duties. At the time of the tragedy, HPA was insured under a workers compensation and employers liability policy (Policy). The insurer providing the Policy was Insurance Company of the West (ICW).
Elliott’s estate (spouse) filed a wrongful death lawsuit against HPA, alleging gross negligence on the part of HPA. The lawsuit proceeded without participation by ICW. Under that action, the estate made several complaints. It accused the employer of various acts. One was that HPA knew of, but ignored, the perilous nature of the work process it asked the deceased worker to perform.
The plaintiff estate also alleged that HPA did not properly classify the work and failed to address dangers. Further, HPA was accused of choosing not to protect the deceased (via known safety procedures) and that the company intended to cause injury as it failed to install protective measures that it was previously advised could prevent worker injuries. Thus, these actions were the cause of their loved one’s wrongful death.
While the estate’s lawsuit was still pending, HPA sued ICW to defend it against the estate’s claim. ICW responded by denying that it had an obligation to address the claim due to the loss being excluded. The insurer filed a counter motion, requesting the court declare it had no duty to pay any loss nor provide HPA a legal defense. The court ruled in favor of ICW. HPA appealed.
Under the appeal, ICW adhered to its position that the estate’s various allegations were subject to the state’s (Indiana) workers compensation laws. Therefore, due to the policy’s employers liability section excluding coverage for liability created by workers compensation or similar laws, no coverage was available.
The higher court framed the issue that needed review, which was whether the policy’s workers compensation exclusion was applicable to the loss. HPA argued that the estate’s allegations pointed to an intentional act. Therefore, the loss fell outside of the provisions of the State Workers Compensation Act.
The higher court reviewed cases it found to be relevant and found that, while the Act would not apply to injuries that were intentionally caused, the allegations raised by the estate and relied upon by HPA were still subject to the Workers Compensation Act. In its view, the allegations pointed to gross negligence on the part of HPA. However, its actions were not at a level of certainty that injury or death would be a foreseeable result. In other words, even recklessness on the part of an employer would not deem any resulting injury to be deliberate.
HPA also asked the higher court to present a question to the state’s Supreme Court for certification. The question was whether certain types of intentional torts created a duty for an insurer to defend and indemnify. The court ruled that the question did not meet established standards to request certification. The lower court’s decision in favor of ICW was affirmed.
Insurance Company of the West v. High Performance Alloys, Inc.—U.S. Court of Appeals for the Seventh Circuit—No. 25-1327—August 4, 2026.
