Injured worker can seek UIM benefits from employer’s auto insurer

The Colorado Supreme Court ruled Tuesday that a worker injured by a third party in a car crash can seek underinsured motorist coverage from his employer’s commercial auto insurer.

In answering a certified question from a federal judge in Denver, the state high court said in Kevin Klabon v. Travelers Property Casualty Co. of America that the request for underinsured motorist benefits from Travelers was not barred by the exclusivity clause of the Workers’ Compensation Act of Colorado.

Mr. Klabon, who works as a technician for CMI Legacy LLC, was injured when he was driving a company van that was struck by a vehicle driven by Rodrigo Canchola-Rodriguez, who failed to stop at a red light. Mr. Klabon sought and received workers compensation benefits from CMI through its comp insurer, Pinnacol Assurance, court records show.

Mr. Klabon settled a claim with Mr. Canchola-Rodriguez’s auto liability insurer for the $25,000 bodily injury policy limit and sought UIM benefits under a commercial auto policy issued by Travelers to CMI. Travelers paid $45,766.68 to Mr. Klabon for the claim rather than the requested $76,766.

Mr. Klabon sued Travelers in Colorado state court, claiming the insurer unreasonably denied and delayed payment on his claim for UIM benefits and that it did so in bad faith and in breach of contract.

Travelers removed the case to federal court and moved for summary judgment, arguing Mr. Klabon’s receipt of workers compensation benefits barred his lawsuit under the state comp act’s exclusivity and immunity provisions. The federal judge certified the question to Colorado’s high court.

Representatives for the parties did not respond to requests for comment.