Many employment-based insurance policies, including workers’ compensation, require employers to notify their carriers of a potential claim “as soon as practicable.”
Insurance companies have been known to refuse to defend a case if the policyholder doesn’t promptly report an accident or injury, and courts often agree the carrier had no liability.
Best bet: Err on the side of caution. Call your agent or insurance company after an injury or accident. Let the carrier sort out whether it’s a covered claim.
Recent case: Michael Clegg fell off the roof of a building working for a subcontractor hired by Klersy Building Corporation. Kevin Klersy knew that the subcontractor carried workers’ comp and general liability coverage, and assumed it would handle the claim.
Klersy didn’t call his insurance company until Clegg sued him. But Klersy’s insurance carrier said it wouldn’t cover the injury since he hadn’t notified it right away.
Klersy sued. He had to explain to the court why he hadn’t called the insurance company as soon as he knew about the accident. He said he thought it was the subcontractor’s job to handle the workers’ comp claim. Even though he was wrong, the court cut him a break and made the insurance company live up to its contract to defend Klersy. But you might not be so lucky. (Klersy v. Harleysville Worcester Insurance Company, No. 501042, Supreme Court of New York, Appellate Division, 2007)
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