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Key Handling Systems Inc. v. Workers' Compensation Appeal Board3/22/1999
Submitted: December 12, 1997
For the first time the Court must decide whether an employer obtains workers compensation insurance coverage from the State Workers' Insurance Fund (SWIF) merely by mailing an unsolicited application and premium to SWIF. We hold that an employer is not assured of coverage with SWIF until it receives a certificate of insurance from SWIF and a receipt for the premium from the State Treasurer.
New Jersey based Key Handling Systems, Inc. (Employer) appeals from an order of the Workers' Compensation Appeal Board (Board) affirming the decision of a Workers' Compensation Judge (WCJ) who held Employer liable under the Pennsylvania Workers' Compensation Act (Act) for the payment of Jeffrey Jenkins' (Claimant) workers' compensation benefits and denied Employer's assertion that Employer had insurance coverage in Pennsylvania with SWIF at the time of Claimant's injury. We affirm.
On June 8, 1990, Employer sent SWIF a check for $620.00 and an application for workers' compensation insurance coverage, applying for coverage effective June 24, 1990. (R.R. 5a.) SWIF received the application and check on June 19, 1990. (R.R. 7a.) Twenty days after its receipt, SWIF mailed to Employer both the application and the check, stating that SWIF required further information from Employer before a policy could be issued. (R.R. 9a.) On July 27, 1990, SWIF received from Employer both the additional information that it originally requested and an additional premium. SWIF then issued a certificate of coverage to Employer at an annual premium of $2,792, effective July 24, 1990. (R.R. 12a.)
On July 9, 1990, Claimant suffered work-related multiple traumatic injuries at a construction site in Pennsylvania. Travelers Insurance Company (Travelers), Employer's workers' compensation carrier, also headquartered in New Jersey, apparently initially paid the claim because Employer submitted the claim to Travelers in New Jersey. Subsequently, on August 23, 1991, Claimant filed a Claim Petition in Pennsylvania claiming eligibility to receive benefits there under Pennsylvania law on the basis that his employment contract and his injury occurred in Pennsylvania. In the Pennsylvania Claim Petition, Claimant named Travelers as the insurance carrier for Employer.
At a WCJ hearing on January 31, 1995, Travelers' counsel appeared before the WCJ and contested any liability by the carrier for Pennsylvania injuries based upon its specific express exclusion of Pennsylvania liability in Employer's policy.
At the hearing on January 31, 1995, Gilbert Meierhans (Meierhans), testified unsworn, in colloquy with the WCJ and Claimant's counsel, that he, as controller for Employer, signed and sent to SWIF three weeks before Claimant was injured, an application for workers' compensation insurance coverage with SWIF on behalf of Employer on June 8, 1990. (R.R. 5a, 6a.) Meierhans also testified: (1) that the Travelers policy excluded Pennsylvania from its covered territory, and (2) that Employer did apply for insurance coverage with SWIF. Meierhans also responded to questions from both the WCJ and Claimant's attorney that he was not an attorney, but had come to the hearing without an attorney thinking the problem about insurance coverage could be worked out. (R.R. 18a.)
Meierhans admitted that Employer received notice of the hearing and that he had been authorized by the principals of Employer corporation to attend the hearing. (R.R. 32a.) The WCJ dismissed Travelers from the proceedings by Interlocutory Order dated February 24, 1995, based on the testimony of Employer's controller. (R.R. 49-50a.) Only after that order did Employer's counsel enter its appearance a
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