IL: Statutory Cap Does Not Apply to Guaranty Fund Payments Related to Excess Comp Coverage

IL: Statutory Cap Does Not Apply to Guaranty Fund Payments Related to Excess Comp Coverage

A divided Illinois Supreme Court recently held that a $300,000 cap on payment of individual claims related to obligations of insolvent carriers by the Illinois Insurance Guaranty Fund does not apply to excess coverage policies providing workers’ compensation protection to employers.  By statute, 215 ILCS 5/537.2, the cap is inapplicable to “any workers compensation claims.” It was unquestioned that the cap did not apply to claims filed under policies providing primary workers’ compensation coverage.  It was unclear, however, if the cap might apply to claims that were related to policies providing excess coverage.  The majority concluded that the law made no reference to and did not differentiate between primary and excess coverage policies.  In the instant case, therefore, the Fund improperly ended payments for a workers' compensation award after the cap was reached.

Reported by Thomas A. Robinson, J.D.

LexisNexis Online Subscribers: Citations below link to Lexis Advance. Bracketed citations link to lexis.com.

See Skokie Castings, Inc. v. Illinois Ins. Guar. Fund, 2013 Ill. LEXIS 1355 (Oct. 18, 2013) [2013 Ill. LEXIS 1355 (Oct. 18, 2013)]

See generally Larson’s Workers’ Compensation Law, § 102.04 [102.04]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.

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