Dec Page

The question of the month deals with second (or successive) injury funds. These funds are meant to encourage employers to hire disabled workers. The funds respond when an employee, who is already disabled, is injured on the job and becomes totally disabled because of the combination of his prior condition and the occupational injury. Without a second injury fund, an employer (or its workers compensation insurer) could be liable for the cost of total disability when, in fact, the occupational accident individually would not result in total disability.

There are many questions that accompany the second injury fund and the answers are based on individual state law. For answers to questions about the fund and for a comparison chart showing how individual states address the issue, see the designated article in the Bulletins.

The court cases discussed in the Dec Page focus mainly on how some courts interpret policy language. In a case from Kansas , the U.S. District Court ruled that even though coverage under a policy has ceased, the policy itself was not cancelled; this was based on how the court interpreted phrases in the policy such as “coverage shall cease” and “the policy automatically cancelled”. An appeals court in Ohio had to determine whether a hired driver was a permissive driver and, thus, an insured under the terms of an auto policy. A court of appeals in Oregon had to answer the question of who is the “policyholder” of an auto policy. Is it the named insured only? All listed drivers? Or anyone using the covered auto with permission?

The final court case strays from a discussion of policy language to a discussion of the last injurious exposure rule. This rule pertains to workers compensation payments and the issue of which party is going to be responsible for those payments where two or more employers are potentially liable. The rule is subject to individual state court interpretation and in this instance, the Montana Supreme Court established that state's position on the subject.

Questions and Answers

In order for there to be Fair Rental Value coverage, does the insured need to live in part of the property? See Fair Rental Value and Occupancy of the Dwelling. When an insured sells property online but never receives payment, is the loss of the property sold considered a loss? See Theft of Property Sold Online.

How does the HO 04 90 Personal Property Replacement cost endorsement work? See HO 04 90 Personal Property Replacement Cost Endorsement Application.

Builders Risk Insurance

Coverage for insureds with construction exposures beyond the limited parameters of the building and personal property coverage form is accomplished through use of the simplified language builders risk forms and endorsements. The Builders Risk Insurance article has been updated to reflect changes to the form.

Fixtures

The commercial property forms refer to fixtures as covered property in three places. What are fixtures? Do fixtures have different coverage needs? If fixtures are covered as part of a building, why the need to mention them separately? Fixtures discusses the status of fixtures.

Third-Party Beneficiaries

Insurance policies are contracts between parties. Sometimes, however, provisions are made to protect the property of those who are not parties to the contract. Such provisions may give third parties some of the same rights under the policy as the named insured and are discussed in Third Party Beneficiaries.