Stop Gap Coverage A Must For Many Employers, But Doesn’t Cover Everything

When an Ohio worker is injured on the job, the usual remedy for them is to file for workers compensation. That’s because Ohio is one of five states known as “monopolistic”, meaning workers compensation insurance is provided by a state fund rather than by private insurance.

But in recent years, more and more injured workers are taking additional civil action against their employers, filing what are known as intentional tort claims.

To get this additional remedy above and beyond workers comp, the employee has to prove something akin to intentional misconduct by the employer. Acts such as an employer punching an employee or deliberately removing a safeguard that results in injury would fall within the intent of Ohio law (R.C. §2745.01).

For employers, such claims can be problematic for many reasons, including that in “monopolistic” Ohio the workers compensation program doesn’t cover employer intentional tort claims. To fill this gap, employers need what is known as stop gap coverage.

Stop gap coverage is especially important for companies whose employees are involved in potentially hazardous work. However, there are some caveats to the coverage that companies should understand.

Based on the way many of these policies are written – and due to Ohio Supreme Court interpretations – insurers may be compelled to defend the employer from an intentional tort claim but not indemnify them. For starters, R.C. § 2745.01(C) establishes a rebuttable presumption that the employer intended to injure the worker if the employer deliberately removed a safety guard. Additionally, in Hoyle v. DTJ Enterprises, Inc. (2015), the Ohio Supreme Court determined the following statement of law:

“An insurance provision that excludes coverage for acts committed with the deliberate intent to injure an employee precludes coverage for employer intentional torts, which require a finding that the employer intended to injure the employee.”

That means that by proving the employer’s act was deliberate and intentional, the insurer is off the hook for paying for damages. The insurer must still provide the insured a defense, however, and that also can be costly.

During discovery and trial, defense attorneys may call upon multiple experts to testify. They might enlist a workplace safety expert to explain what happened with the safety guard; a vocational rehabilitation expert to describe what the injured employee can and cannot do going forward; an economist to project the worker’s future earnings; and medical doctors to describe the injuries. The legal bill could easily surpass $100,000.

That is why, even with no indemnification by the insurer, many companies will still benefit from stop gap coverage. They don’t want the expense of defending the litigation, and they also know or are told these types of cases usually go against them.

Faced with paying big legal bills and the likely prospect of losing the case – and receiving no money from the insurer – employers often decide to settle intentional tort claims. Even so, stop gap coverage is usually worth the expense.