Michael Moline
You can’t buy workers’ compensation insurance to cover an injury that has already happened, a state appeals court ruled Wednesday.
“Uninsured persons cannot experience a loss, then scramble to get insurance and fail to disclose their loss, and then have the cost of their loss borne by the new insurer,” Judge Timothy Osterhaus wrote for a unanimous three-judge panel of the 1st District Court of Appeal (DCA).
“Florida’s insurance laws apply known loss principles and preclude coverage for losses that have already taken place,” the panel said in overturning Judge of Compensation Claims Iliana Forte, who’d approved coverage for injured worker Jose Sorto.
Judges Clay Roberts and Kent Wetherell II concurred in the opinion.
The case started in May 2016, when a construction vehicle ran over Sorto’s foot on a job site, resulting in a “bad” injury, the court said.
His employer, subcontractor JAM Construction, called its broker to arrange a claim, not knowing that he hadn’t finalized coverage.
The broker secured a policy from Normandy Insurance Co., effective at 12:01 a.m. on the morning of the accident, but didn’t disclose the injury. Normandy paid claims until it learned the accident preceded the coverage purchase.
Normandy argued the general contractor’s carrier, Amerisure Insurance Co., should be on the hook.
Osterhaus cited clear public policy, enshrined in Florida’s workers’ compensation statute, in ruling that Normandy was right. He also cited precedents from the 2nd and 5th DCAs.
“Our cases explicitly forbid insureds from saddling insurers with known losses, as opposed to covering for the risk of loss,” he wrote.
“Insurance is meant to cover uncertainties, not certain losses. And we have recognized that extending insurer liability to cover known losses would undermine the concept of insurance and the stability of the insurance system.”
