The Pennsylvania Superior Court recently affirmed the decision of the Delaware County Court of Common Pleas in School Claims Service v. Gardler. In this matter, the plaintiff was a school bus driver who was injured as a result of an accident. After collecting the available bodily injury insurance policy limits from the responsible party, she attempted to make a claim for underinsured motorist benefits under the employer s motor vehicle policy. As she had been injured in the course of her employment, she was also collecting workers compensation benefits. The school’s auto insurer denied the claim, pointing to an exclusion in the auto policy which provided that there was no coverage for any element of loss if the claimant was entitled to collect for the same element of loss under workers compensation or similar law.
The matter initially went to arbitration and the arbitration panel determined that the exclusion was not enforceable. The insurance company filed a petition to vacate or modify the award, which was denied by the trial court. The insurer appealed. On appeal, the Superior Court affirmed the trial court’s decision, holding that the exclusion in the policy was void as against public policy. The Superior Court relied on the Pennsylvania Supreme Court’s decision in Heller v. Pennsylvania League of Cities, 32 A.3d 1213 (Pa. 2011). There, the court determined that an exclusion such as the one at issue rendered the underinsured motorist coverage under the policy illusory, as although the employer bought and paid for the coverage, recovery of UIM benefits would almost never attach if the exclusion were enforced, as the vast majority of claims under the auto policy would be made by workers eligible to receive workers compensation benefits. It is important to note that the workers compensation insurance carrier would still be entitled to assert a lien against any recovery under the employer’s UIM policy.
This decision is important to injured workers in that it affirms their right to seek the maximum compensation available to them in the event of an on-the-job injury. Although an injured worker in these circumstances may be required to reimburse a workers compensation carrier in the event of a UIM recovery, such liens are always subject to negotiation or waiver. Additionally, permitting the recovery of both wage loss and medical expenses in the UIM context can assist in increasing the overall value of a claim, leading to larger awards and settlements.