United Financial Casualty Co. v. Greg Ball

Summary

The Fourth Circuit held that the workers' compensation exclusion in a commercial auto policy did not bar coverage for a permissive user's liability to an employee of the named insured, because the employee's negligence claim against a third party is not an "obligation under workers' compensation law." The court further held that the policy's employee indemnification and employer's liability exclusion, while facially applicable, contravened West Virginia Code § 33-6-31(a), which mandates liability coverage for permissive users of insured vehicles, and the statutory exception in § 33-6-31(h) for employer liability does not apply to third-party claims. Thus, neither exclusion precluded coverage for the permissive user.

Holdings

1. The Worker's Compensation exclusion does not apply because Ball's claim against Perry is a third-party common law tort claim, not a workers' compensation claim.
2. The Employee Indemnification and Employer's Liability exclusion is unenforceable because it contravenes West Virginia Code § 33-6-31(a), which requires coverage for permissive users.

Questions Presented

1. Whether the Worker's Compensation exclusion in the policy bars coverage for the liability of a permissive user (Perry) to an employee (Ball) of the named insured.
2. Whether the Employee Indemnification and Employer's Liability exclusion can be enforced to deny coverage to a permissive user, and if not, whether it contravenes West Virginia Code § 33-6-31(a).

Disposition

vacated and remanded