A federal appellate court has ordered Hartford Accident and Indemnity Co. to pay half of a workers compensation claim for a bakery delivery driver in Missouri who was killed in an accident after another insurer discovered that the bakery had two policies with two different companies.
The owners of Hoeckele’s Bakery in Perryville, Missouri, had unintentionally secured double coverage for workers compensation between July 2013 and July 2014, an oversight that became known when one of the insurers — North Palm Beach, Florida-based Employers Preferred Insurance Co. — paid a claim stemming from the fatality and later asked Hartford, Connecticut-based Hartford to pay half of the claim, according to documents in Employers Preferred Insurance Co. v. Hartford Accident and Indemnity Co., filed in the 8th U.S. Circuit Court of Appeals in St. Louis.
Both policies contained language guaranteeing an equal division of costs in the event of concurrent coverage, Employers Preferred argued, according to records.
Declining to pay undisclosed share of the comp claim “Hartford maintains that it does not owe any contribution because the Hoeckeles never intended to carry two policies for the Bakery and terminated the redundant coverage with Hartford,” documents state.
“When a Hartford agent told Paul (Hoeckele) after the accident that the Hartford policy was active, Paul first expressed confusion, thinking that the premium had never been paid, and then filed a cancellation request on July 8, 2014. Hartford retroactively cancelled the policy, effective July 20, 2013, and issued the Hoeckeles a full refund of their premium,” records state.
According to Thursday’s ruling, affirming an earlier U.S. District Court for the Eastern District of Missouri decision, “this argument fails because Missouri law bars Hartford from canceling a policy, and eliminating its duty to defend and indemnify, after an insured has become liable for a workers’ compensation claim.”
The Hartford had also argued that it had been a “mutual mistake” to cover the bakery as it had already secured coverage, thus the policy would fall under state law that describes such arrangements in the terms that “no real agreement is formed.”
The ruling, however, found that the decision to buy two policies was the mistake of the owners of the bakery, and not of Hartford.
Officials at Hartford could not immediately be reached for comment.