Indemnification: Between Insurers

Hartford v. Montana State Fund, In re Claim of McKirdy [08/01/12] 2012 MTWCC 28 Where the Court concluded that the claimant suffered an industrial injury on a specific date, and the employer’s subsequent insurer paid under a reservation of rights, the Court concluded that the at-risk insurer could not bar the subsequent insurer from raising a defense on the grounds that the claimant, who was not a party to the lawsuit, might also benefit if the subsequent insurer prevailed in its indemnification claim.

Liberty Northwest v. Montana State Fund (In re Ellis) [03/01/11] 2011 MTWCC 8 An insurer who paid benefits on a workers’ compensation claim where the benefits were properly and primarily owed by another insurer is entitled to indemnification from the liable insurer.
Montana State Fund v. Zurich American (In Re Golt) [01/21/09] 2009 MTWCC 3 Since Claimant did not prove that her condition is compensable as a work-related injury, neither insurer who paid Claimant benefits can be ordered to indemnify the other.
Insurance Company of State of Pennsylvania and Carol Bergquist v. State Compensation Insurance Fund [5/2/00] 2000 MTWCC 26 Insurer which had paid benefits to claimant sought indemnification from carrier at risk following earlier injury (State Fund). State Fund sought to amend its response to WCC petition to allege that it should not be required to indemnify other insurer for medical benefits which were unreasonable or for temporary total disability benefits claimant should not have received because he was able to work. In allowing amendment, WCC noted one insurer has right to claim indemnification for benefits which "should have been paid" by another carrier. Question raised was whether what "should have been paid" may be determined by hindsight, which WCC doubted was proper standard. Although not resolving issue because not adequately briefed, WCC suggested that if insurer used reasonable judgment in adjusting claim it may be inequitable to deny indemnification based upon subsequently discovered facts. On the other hand, if insurer's adjustment practices were unreasonable and it paid, for example, benefits for medical procedures it knew or should have known, at the time of payment, were not reasonable, then it may be inequitable to allow indemnification.
Liberty Northwest Ins. Corp. v. Champion International Corp. (Re: Deschamps) [3/27/96] 1996 MTWCC 28 Where insurer clearly and unequivocally accepted liability for claimant’s back condition without reservation of rights, it cannot repudiate that acceptance, but it may seek indemnification from a prior insurer who bears responsibility for claimant’s condition.

Liberty Northwest Ins. Corp. v. Bevis [04/17/95] 1995 MTWCC 28 Where insurer at risk for subsequent injury contends liability remains with insurer at risk on earlier injury, the second insurer must prove two elements, one, that claimant had attained maximum medical healing from the first injury and, two, that he sustained an injury after reaching MMI. For a subsequent injury to relieve the first insurer of all future liability for a medical condition, it must amount to a permanent aggravation of the underlying condition.

Liberty Northwest Ins. Corp. v. Bevis [04/17/95] 1995 MTWCC 28 Where treating physician testified convincingly that subsequent incident for which second insurer was at risk caused only a temporary aggravation of claimant’s back condition, the insurer with liability for that back condition must indemnify the second insurer for benefits that insurer paid under reservation of rights.