TKK USA, Inc. v. Safety Nat. Cas. Co.

727 F.3d 782 (7th Cir. 2013)

Words & Phrases

Worker's Compensation: In General

Trial Judge

Judge James B. Zagel

Appellate Judge

Circuit Judge Hamilton

Holding

Policy covering liability under “Workers’ Compensation or Employers’ Liability Laws” covered cost of defending an employer against an employee’s common law negligence suit even though employer waived the exclusive remedy affirmative defense..

Fact Summary

Employers buy liability coverage for claims by employees tolimittheir risks and to buy peace of mind. The latest creative legal theory for avoiding workers’ compensation statutes may seem doomed to certain defeat, but the employer‐defendant must still defend itself and must confront a small but non‐zero risk that a new theory or exception might work in the particu­lar case. An insured employer sued by an employee on a novel theory would reasonably expect to be covered by the policy language here. Covered losses include the expensesof defend­ing “groundless” claims under “Employers’ Liability Laws,” which certainly implies that coverage is available even when a statute seems to provide a clear defense for a claim against an employer under a statute or the common law. Yet Safety National’s narrow reading of the undefined term “Employers’ Liability Laws” would leave employers exposed to those risks.

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