Uninsured Motorist Coverage And Workers Comp

An insurance law lawyer might be asked how uninsured motorist coverage works with workers compensation insurance.  One way that it works is explained in a 2016, Austin Court of Appeals opinion.  The opinion is styled Soledad v. Texas Farm Bureau.

Soledad was a passenger in a vehicle owned and leased by her employer, Schneider National Carriers, when it was involved in a single vehicle accident.  Jeff Noe, a fellow employee, was driving the vehicle.  Both were working with Schneider at the time of the accident, which was the result of Noe’s negligence.  Soledad suffered injuries.

Soledad had uninsured motorist (UM) coverage on her own personal vehicle with Farm Bureau.  Schneider had workers compensation insurance on its employees and also had liability coverage on its vehicles.

Soledad received workers compensation benefits from Schneider’s policy and then filed a claim against Farm Bureau for UM benefits, claiming that the damages she sustained during the accident exceeded the damages covered by Schneider’s workers compensation policy.

Soledad sued Farm Bureau, seeking declaratory relief.  Farm Bureau filed a motion for summary judgment arguing that Soledad was not entitled to UM benefits because (1) Soledad was not “legally entitled to recover” damages from the owner or operator of the vehicle involved in the accident because such recovery is barred by the exclusive remedy provision of the Texas Workers’ Compensation Act (TWCA), and (2) neither Noe nor Schneider was uninsured or underinsured as defined by the policy.  The trial court ruled in favor of Farm Bureau and this appeals court affirmed the ruling.

Soledad’s policy with Farm Bureau includes the following provision:

Texas Farm Bureau will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, cause by an accident.

Farm Bureau does not dispute the fact that Noe’s negligence caused Soledad’s injuries.  Instead, Farm Bureau argues that Soledad is not “legally entitled to recover” damages from either Schneider or Noe because such recovery is barred by the TWCA, which provides, “Recovery of workers’ compensation benefits is the exclusive remedy against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.  Under this exclusive remedy provision, an employer that subscribes to workers’ compensation insurance receives immunity from the tort claims of its employees.  Farm Bureau argues that, because the TWCA’s exclusive remedy provision bars Soledad from recovering damages from Schneider (her employer) or Noe (an employee of her employer), she is not “legally entitled to recover” from either Schneider or Noe.  Therefore, Soledad does not satisfy the policy’s requirements and may not recover UM benefits.

This court agreed with Farm Bureau.

The purpose of the policy provision is to prevent a covered person from recovering twice for the same injuries — once from her employer’s workers’ compensation insurance carrier and once from her UM insurance carrier.

There are situations where Soledad could have recovered.  For instance, if Soledad’s injuries had been caused by the negligence of an uninsured motorist other than her employer or co-employee, she might have recovered workers’ compensation benefits, and, if those benefits did not cover all of her injuries, she might have recovered UM benefits, because she would be “legally entitled to recover” damages from the negligent party.  However, when, as here, the negligent party was the covered person’s employer or co-employee, the TWCA’s exclusive remedy provision applies, and the covered person is not entitled to UM benefits.

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