Conundrum – Accident In State With No Coverage
An employee has an Accident In State with no coverage under the workers comp policy (uh-oh). Yesterday, we had a case of an employer in a non-coverage conundrum due to an employee being injured out-of-state. Would the AZ Workers Comp carrier pay on an accident that occurred in UT? Would the employer have to pay out-of-pocket for this claim? Would the state of UT fine the employer for no coverage?
The one variable that I did not mention last time is the employee was a sub-contractor. He was covered under the policy as his payroll was specifically listed in the policy. A claim was filed against the carrier for UT benefits. Of course, the carrier denied the claim as there was no coverage for the employee in UT.
What about true path coverage? The employee was not in the course and scope (as I advised) due to wandering off the true path to get back home. The alleged shortcut through UT was not any shorter.
The employee finally admitted he had decided to stop by a remote store to pick up a renowned dessert his family liked that was only made by the store.
The employee subsequently withdrew his claim in UT and filed the claim in AZ. Would the AZ carrier deny due to jurisdiction? Would the employee try to sue the employer directly for no coverage?
The WALSH test and the fact the sub-contractor’s payroll was specifically listed on the employer’s AZ payroll was what I thought was strong enough evidence for the carrier to pay the claim.
The adjuster balked at first, but then the tried-and-true WALSH test saved the day. With the Worked,
Lived, Salaried and Hired part of the sub-contract being all in AZ, only the Accident part of the WALSH test was in UT.
The final resolution was the claim was paid for by the carrier with AZ-based benefits. The injured employee had to wait two months to receive benefits. He is now back driving for the same employer.
Bottom Line – just because an employee is injured in a certain state does not mean that is the state of jurisdiction. Trucking and transportation companies face this type of situation very often.
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