Maryland courts uphold co-employee exclusion

Austin Kirk

By Austin Kirk
Posted November 21, 2006


This week the Maryland Court of Appeals issued an opinion which will allow insurance companies to continue reducing the amount of coverage they provide for accidents in which a co-worker of their insured is injured.  As a result of this co-employee exclusion, Maryland auto accident victims are often denied coverage they should be entitled to and Maryland drivers are exposed to liability when they thought they had protected themselves.

Currently the legislature requires that Maryland auto accident insurance companies provide at least $20,000 in coverage per person injured, up to a total of $40,000 for each accident.  If a driver elects to purchase this minimum coverage, and their negligence causes serious injuries, the negligent driver may be exposed to personal liability for the damages over $20,000.  This could result in the negligent driver losing their home, their personal assets and their wages to pay for the injuries they caused.

To protect their personal property, many Maryland drivers choose to purchase additional insurance coverage for significantly more than $20,000.  Most insurance companies offer to sell coverage of up to $50,000, $100,000, $300,000 or even over $1 million.  To obtain this additional coverage drivers pay higher insurance premiums.

Although the insurance company receives additional premiums, most Maryland policies contain this exclusion which reduces the amont of coverage to $20,000 if the accident victim is a co-worker in the course of their employment.  The insurance industry attempts to argue that the exclusion is justified since the victim can pursue Maryland workers’ compensation benefits.  However, Maryland workers comp is often an incomplete remedy, and many seriously injured workers elect to pursue collection of the damages they are entitled to from the personal assets of the driver.

James K. MacAlister, one of the Saiontz & Kirk Maryland auto accident lawyers, has been a strong advocate against this exclusion.  He filed a brief in the case on behalf of the Maryland Trial Lawyers Association arguing that the insurance companies should not be allowed to reduce the amount of coverage down just because the victim is a co-worker.  Following this recent decision, Mr. MacAlister was quoted in the Maryland Daily Record pointing out how the opinion leaves employees who accidentally injure their co-workers exposed to substantial personal liability, even though they attempted to protect themselves by purchasing additional coverage.

Although the Maryland Court of Appeals found that the current laws do not preclude insurance companies from including such an exclusion, the Maryland legislature could still add language to the statute to require that the same amount of insurance coverage be provided to all accident victims, even if they are co-workers.

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