Massachusetts Court Discusses Cancellation of Insurance Policies

Generally, employers in Massachusetts carry workers’ compensation coverage to provide benefits for any employees who sustain injuries on the job. If employers fail to comply with the terms of their workers’ compensation policies, though, they may be canceled. A policy cannot be canceled without adequate notice, however, as discussed in a recent Massachusetts case. If you were hurt at work, it is in your best interest to speak to a Massachusetts workers’ compensation lawyer to assess what benefits you may be able to recover.

Case History

It is alleged that the insurer attempted to cancel a voluntary policy of workers’ compensation insurance issued to the employer due to nonpayment of the premium. The employer never receive notice of the cancellation, however. Subsequently, the employee suffered an injury after the attempted cancellation. Under the assumption that the policy was not in force, he then sought and obtained benefits from the Workers’ Compensation Trust Fund. The Trust Fund later sought to add the employer to the proceedings, which resulted in an evidentiary hearing to determine the cancellation’s validity.

It is reported that an administrative judge conducted a hearing and concluded that the attempted cancellation was ineffective, holding the insurer liable for any benefits paid to the employee. The decision was subsequently affirmed by the board in a split decision. The insurer appealed.

Notice Requirements for Cancelling Workers’ Compensation Insurance Policies

 The central issue on appeal was whether the insurer’s notice of cancellation met the statutory requirements for cancellation and, consequently, the insurer’s liability for benefits awarded to the employee. The court agreed with the board’s determination that the insurer was required to comply with Massachusetts law regarding canceling the voluntary workers’ compensation policy. This statute in question outlined the procedures for cancellation of insurance contracts, including the requirement to serve notice upon the insured.

The insurer argued that it had sent notice to the address in its records and that the address used in the notice was the insured’s “last address as shown by the company’s records.” The court acknowledged the insurer’s argument but noted that the policy documents were ambiguous regarding the purpose of the two addresses listed.

The court determined that both addresses, Drake Road and Electric Avenue, were effectively “last addresses” under the statute, which the insurer was required to consider for notifying the insured. Since the notice was returned as undeliverable and the insurer was aware of this, it should have sent another notice to the alternative “last address” in its records. The court emphasized that the statute’s purpose is to ensure that the insured is informed of the impending policy cancellation, and compliance with the statute is essential in a workers’ compensation policy to protect all parties involved. Consequently, the court upheld the board’s decision, holding the insurer liable for any benefits paid to the employee. 

Confer with a Capable Massachusetts Attorney

Employers have an obligation to provide injured employees with workers’ compensation benefits, regardless of whether they have insurance to cover such benefits. If you were hurt while working, you should speak to an attorney about your rights. James K. Meehan of the Law Office of James K. Meehan is a capable Massachusetts workers’ compensation lawyer, and if you hire him, he will help you seek the best legal result available under the facts of your case. You can reach Mr. Meehan to arrange a meeting via the online contact form by calling him at 508-822-6600.