UIM policy’s non-duplication clause was upheld and plaintiff could not recover at the UIM trial the bills, wages, and disfigurement for which he was previously compensated under the carrier’s workers’ compensation policy.
The plaintiff received workers’ compensation benefits following an automobile accident that occurred while he was on the job. Subsequently, he made an underinsured motorist (UIM) claim through his employer’s policy as well. Both policies were issued by Travelers Insurance Company. The UIM policy contained a “non-duplication” clause that included a restriction on claims for any element of losses the plaintiff was entitled to recover under workers’ compensation. Travelers filed a motion in limine to preclude, at the UIM trial, the plaintiff from pleading, proving, or recovering losses that were payable under PIP and/or workers’ compensation (including bills and wages). The Superior Court held that the non-duplication clause was enforceable. It read as follows:
We will not make a duplicate payment under this Coverage for any element of "loss" for which payment has been made by or for [anyone] who is legally responsible, including all sums paid under the policy's Liability Coverage.
We will 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, disability benefits or similar law.
The court reasoned that “Delaware’s UIM statute (18 Del. C. 3902) does not directly address the issue of limitation or exclusion in the context of a non-duplication clause in a UIM policy taken out by an employer on behalf of an employee.” The non-duplication clause is not violative of public policy. As the court explained: “This provision does not limit a plaintiff to UIM coverage as a whole, but rather limits recovery to the plaintiff for amounts for which that plaintiff has already been compensated, as happened here.” Travelers was not obligated to purchase UIM coverage, nor was it required to purchase duplicative coverage. In sum, because the plaintiff recovered payments for medical bills, wages and disfigurement, he was not allowed to plead, prove and/or recover these losses against Travelers at trial.
Case Law Alerts, 2nd Quarter, April 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2020 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.