Delaware Supreme Court Says Injured Employees May Recover Under Employer’s Underinsured Motorist Coverage

The Supreme Court of Delaware, reversing earlier rulings by a state trial court, held that the exclusive remedy provisions of the state’s Workers’ Compensation Act (the Act), two workers who sustained work-related injuries in automobile accidents may proceed against their employer’s automobile liability insurer under the underinsured motorist provisions of the respective policies [Henry v. Cincinnati Ins. Co., 2019 Del. LEXIS 292 (June 11, 2019)]. The Supreme Court stressed that an insurance company that issues an automobile liability policy insuring an employer’s vehicles with coverage including underinsured-motorist coverage is not an “employer” under the Act. Readers should note that this decision is at odds with the recent decision of a U.S. District Court in Colorado that I recently discussed here.


Two cases were consolidated for purposes of oral argument, Henry v. Cincinnati Ins. Co., No. 437, 2018, and Fritz v. Cincinnati Ins. Co., No. 565, 2018. In Henry, John and Darlene Henry appealed from a Superior Court order granting Cincinnati Insurance Co.’s motion to dismiss. In Fritz, Charles Fritz appealed from a Superior Court order granting summary judgment in favor of Cincinnati Insurance Co. (Cincinnati). Both cases involved employees who sustained injuries in automobile accidents while operating an employer-owned vehicle during the course of their employment. In both cases, the accidents were each allegedly caused by a third- party tortfeasor. Both employees received workers’ compensation from their respective employers’ workers’ compensation insurance companies pursuant to Delaware’s Workers’ Compensation Act (the Act).

In each case, the vehicle operated by the employee was covered by an automobile liability insurance policy issued to the employer by Cincinnati. In addition to their workers’ compensation benefits, both Henry and Fritz sought to recover underinsured-motorist benefits under the terms of the Cincinnati automobile liability policies. The Superior Court issued its order in Henry first, finding that the exclusive-remedy provision in the Act, 19 Del. C. § 2304, in effect at the time of the accident, precluded Henry from receiving underinsured-motorist benefits under the Cincinnati policy. Subsequently, the Superior Court in Fritz granted Cincinnati’s motion for summary judgment on the same ground.

Prior Case Law

The high court acknowledged that in Simpson v. State, 2016 Del. Super. LEXIS 56 (Jan. 28, 2016), the Superior Court held that the Act’s then-effective exclusivity provision prevented a state employee from recovering underinsured-motorist benefits through the State’s self-insured automobile liability insurance plan. The Superior Court reasoned that allowing recovery would mean the worker was being compensated twice for the same injury.

The high court then noted that In September 2016, following Simpson, the exclusivity provision had been amended. The language the amendment added is noted in bold face below:

Except as expressly excluded in this chapter and except as to uninsured motorist benefits, underinsured motorist benefits, and personal injury protection benefits, every employer and employee, adult and minor, shall be bound by this chapter respectively to pay and to accept compensation for personal injury or death by accident arising out of and in the course of employment, regardless of the question of negligence and to the exclusion of all other rights and remedies [80 Del. Laws ch. 420, § 1 (2016)].

The high court added that In Robinson v. State, 2017 Del. Super. LEXIS 175 (Apr. 11, 2017), aff’d, 176 A.3d 1274 (Del. 2017), the Superior Court found that the above-noted amendment was not retroactive and did not apply to injuries occurring prior to its effective date.

Pre-Amendment Version of Exclusivity Clause Did Not Bar Recovery

The Supreme Court indicated, however, that an injured worker who received workers’ compensation benefits was not barred by the pre-amendment version of the exclusivity clause from recovering underinsured-motorist benefits under an automobile liability policy that his or her employer has procured from a third-party insurance provider since that insurance company is not an “employer” under the Act.

The Act’s Definition of “Employer” Includes Workers’ Compensation Insurers

The Supreme Court stressed that the term “employer” was defined by the Act and that the term covered workers’ compensation insurers as far as practicable. Thus, the employee may not sue the workers’ compensation insurer in relation to workers’ compensation claims. The definition of employer did not, however, include a third-party insurance company that provided an automobile liability policy to the employer. Cincinnati was not, therefore, an “employer” in either of the two cases before the Court.

Shoes of the Alleged Tortfeasor

The Supreme Court concluded that In the case of underinsured-motorist coverage, the insurer stepped into the shoes of the alleged third- party tortfeasor. Accordingly, Cincinnati stepped into the shoes of the alleged tortfeasor in both the Henry case and the Fritz case. The exclusivity provision was not a defense that was available to Cincinnati.

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