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Can a UIM Policy Limit Coverage in a Tort Action After Workers’ Comp?

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The Colorado Court of Appeals got to interpret the language of insurance policies in American Family Mutual Insurance Co., v. Omar Ashour (2017 COA 67).

Omar Ashour (“Ashour”) is an employee and co-owner of Nubilt Restoration & Construction (“Nubilt”). While at Nubilt, Ashour was severely injured when he was pinned by a truck to a nearby tractor-trailer. The accident was caused by the negligence of his co-employee, Rebecca Peake (“Peake”), who didn’t set the airbrake on the truck that rolled and pinned Ashour. Ashour filed a claim with Nubilt’s workers’ compensation carrier and received benefits. He submitted a claim to Nubilt’s corporate liability insurance provider and got a settlement because of a policy rider that covered workplace injuries. Ashour then made a claim under his personal automobile insurance policy with American Family Mutual Insurance (“AFI”)  for Uninsured/Underinsured Motorist (“UIM”) benefits to recover the rest of his damages.

AFI sought a declaratory judgment asking the district court whether Ashour was owed UIM coverage when the language in the policy limited UIM benefits to situations in which the insured was “legally entitled to recover” from the owner or operator of an uninsured or underinsured motor vehicle.

In his answer, Ashour alleged that the phrase “legally entitled to recover” had been interpreted by Colorado courts to mean that an insured must only establish fault of the party causing the injury and the extent of the damages. Ashour asserted an affirmative defense that AFI was estopped from denying coverage on the basis of the policy’s “legally entitled to recover” language. The Court granted AFI’s motion for summary judgment and declared that AFI did not have to pay Ashour UIM benefits. Ashour appealed.

The Court looked at worker’s comp laws and UIM laws. The worker’s comp protects employees who suffer injuries arising from their employment and to give injured workers a reliable source of compensation for their injuries. Colorado law requires that all automobile insurance policies insuring against loss resulting from bodily injury or death must provide UM/UIM coverage. After extensive analysis of the interaction of the UIM insurance requirements and the Act, the Court determined the district court misapplied the law. Ashour’s claim for UIM benefits under his policy with AFI is not barred by the exclusivity provisions of the Act, or by the “legally entitled to recover” language of the policy. The Court reversed the district court and remanded the case, saying summary judgment should be granted to Ashour.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado.

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