Federal Court in Colorado Holds Injured Employee May Not Recover Under Employer’s Uninsured Motorist Coverage

In a diversity insurance case that the court indicated was an issue of first impression, the U.S. District Court for the District of Colorado, construing Colorado law, held that an employee injured in a work-related automobile accident is not entitled to uninsured/underinsured motorist (“UM/UIM”) coverage under a policy of vehicle liability insurance procured by his or her employer [Employers Mut. Cas. Co. v. Trejo, 2019 U.S. Dist. LEXIS 91999 (June 3, 2019)]. Accordingly, the court granted the insurer’s motion for summary judgment in a declaratory judgment action filed against the injured employee seeking such a ruling.


The defendant was seriously injured in an auto accident caused solely by a co-employee’s negligence while both were acting in the course and scope of their employment. The defendant received workers’ compensation benefits for his injuries, but claimed he was also entitled to UM/UIM coverage under a policy of insurance that the employer had procured through the plaintiff insurer. The insurer filed a declaratory judgment action, seeking a ruling that it was not obligated to pay the defendant’s claim.

No Supreme Court of Colorado Ruling on Issue

The court initially noted that there had been no state Supreme Court authority on point, a division of the state’s Court of Appeals had recently analyzed the interplay between the state’s Workers’ Compensation Act (“WCA”) and its UM/UIM statute. The court said that case, American Family Mut. Ins. Co. v. Ashour, 2017 COA 67, 410 P.3d 753, cert. denied, 2018 Colo. LEXIS 38, provided some useful guidance.

The Ashour court had relied upon another Court of Appeals decision, Borjas v. State Farm Mutual Automobile Ins., Co., 33 P.3d 1265, 1269 (Colo. App. 2001), where another division of the court concluded that an insured could still bring a UM claim against her own insurer even though the tortfeasor was entitled to immunity under the Colorado Governmental Immunity Act (“CGIA”). The Borjas division found that persons and entities entitled to immunity under the CGIA would be unaffected by allowing the insured to bring such a claim, and thus the public policies of the UM/UIM statute and the CGIA could be served simultaneously. Based on this reasoning, the Ashour division ruled that an injured employee who received workers’ compensation benefits could still pursue a claim for UIM coverage under his personal auto insurance policy.

Important Distinction: Here, the Issue Involved Employer’s UM/UIM Coverage

The federal district court noted that in the instant case, the injured employee sought to recover not under his own UM/UIM coverage, but rather under coverage secured by the employer. That distinction was important. The parties had stipulated that the employer was immune from suit under the WCA. The defendant worker had provided no Colorado authority for the “illogical proposition” that he was legally entitled to recover from his employer’s insurer.

Court’s Decision Consistent With Public Policy

The court added that allowing the defendant employee to recover additional damages that derive from his immune employer and co-employee would erode public policy behind the WCA. Moreover, the court pointed out that the employee did not decide to obtain coverage under a policy through the insurer, and he did not pay the premiums required under it. Allowing employees to recover under their employer’s policies under these circumstances could, indicated the court, discourage them from purchasing coverage of their own. For additional discussion of these issues, see Larson’s Workers’ Compensation Law, § 110.05.

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