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Diversity Action – Insurance – Workers Compensation

By: Derek Hawkins//October 25, 2016//

Diversity Action – Insurance – Workers Compensation

By: Derek Hawkins//October 25, 2016//

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7th Circuit Court of Appeals

Case Name: Lend Lease (US) Construction Inc., v. Administrative Employer Services, Inc. and Technology Insurance Company, Inc.,

Case No.: 16-1294; 16-1739

Officials: POSNER, RIPPLE, and ROVNER, Circuit Judges.

Focus: Diversity Action – Insurance – Workers Compensation

Appellant files diversity suit seeking reimbursement of deductible paid in workers compensation case.

“Lend Lease alleges that the four injured workers were in‐ sured both by Starr and by TIC, and if this is right there would be an argument for splitting the workers’ compensa‐ tion benefits between the two insurers—and indeed we learned at oral argument that Starr has filed its own lawsuit against AES and TIC. See Home Insurance Co. v. Cincinnati Insurance Co., 821 N.E.2d 269, 316 (Ill. 2004) (“Contribution as it pertains to insurance law is an equitable principle aris‐ ing among coinsurers … and is only available where the con‐ current policies insure the same entities, the same interests, and the same risks.”) (emphasis added). But that’s not this case; and in this case Lend Lease is not asking for a split be‐ tween coinsurers—what good would that do it? Instead it argues that because it is a policyholder that paid a deducti‐ ble in conformity to the Starr policy, it is entitled to contribu‐ tion, or in the alternative to indemnification, from TIC, in the amount of $500,000, which would erase Lend Lease’s de‐ ductible. Had it not been for the deductible, Starr would have had to pay the entire workers’ compensation benefits due the injured employees, so it saved money—but so did Lend Lease, though probably less than the deductible. For the deductible, by reducing Starr’s risk, doubtless had re‐ duced the insurance premiums charged Lend Lease by Starr, by reducing Starr’s potential liability to workers injured while employed on Lend Lease’s construction project. Any‐ way, Lend Lease made a deal with Starr and is bound by it.”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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