Insurers: Duties

Wiard v. Liberty Northwest Ins. Corp., 2003 MT 295 Neither contract principle of covenant of good faith and fair dealing, nor Unfair Trade Practices Act, required insurer to inform claimant of 60-month rule contained in section 39-71-704(1)(d), MCA (1991), regarding using or losing medical benefits.

Hogenson Constr. of ND v. Montana State Fund [10/22/07] 2007 MT 267, 339 Mont. 389, 167 P.3d 916 An insurer has the duty to defend unless the claim against the insured unequivocally falls outside a policy’s coverage. Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108 ¶24. Where the employer’s policy with Montana State Fund expressly incorporated Montana workers’ compensation laws and stated that the insurer had no duty to defend any claim not covered by the insurance, the insurer had no duty to defend the employer in an out-of-state proceeding where a claimant first presented his claim after the twelve-month deadline set forth in § 39-71-601, MCA, had passed.


Hartford Ins. Co. of the Midwest v. Montana State Fund, In re McKirdy [02/11/13] 2013 MTWCC 4 Where there is no dispute that a claim is compensable but the insurers disagree which one is liable for it, the later insurer has a duty to pay benefits under § 39-71-407(5), MCA, unless and until it proves the previous insurer is liable.  The first insurer may be equitably estopped from asserting an affirmative notice defense in an action for indemnity if it initially maintained that the only issue was which of the two insurers was liable and kept silent about its affirmative defense.

Clapham v. Twin City [08/01/12] 2012 MTWCC 27 Respondent’s argument that placing a claim under § 39-71-608, MCA, does not obligate it to pay benefits but only permits it to do so if it feels like it is without merit.  The use of “may” in a statute does not give an insurer discretion to decide to deny a claimant’s request for benefits to which the claimant is otherwise entitled.  The legislature may not delegate absolute discretion to insurers, and an insurer is obligated to pay benefits, including medical benefits, during the time period it placed the claim under § 39-71-608, MCA.

Cornelius v. Lumbermen's Underwriting Alliance [04/27/12] 2012 MTWCC 13 Where Petitioner’s claim was either compensable under her previous industrial injury claim or her new occupational disease claim, the subsequent insurer had a duty to pay her benefits under § 39-71-407(5), MCA, and its failure to do so was unreasonable.

Long v. New Hampshire Ins. Co. [04/10/09] 2009 MTWCC 14 Where a claims adjuster’s notes are not accessible by anyone in Montana for a period of time, the mandate of § 39-71-107(3), MCA, is violated.
Hernandez v. ACE USA [4/24/03] 2003 MTWCC 32 By giving its insured veto power over settlements, the insurer violated section 39-71-2203(3), MCA (2001), which provides that insurers owe a direct duty to claimants to pay benefits.
Hernandez v. National Union Fire Ins. Co. of Pittsburgh [1/31/03] 2003 MTWCC 5 Workers' compensation insurers are directly liable to claimants and have direct duty to claiman's when adjusting claims. Insurers cannot delegate their duties to insured employers.
Gryttenholm v. Fremont Industrial Ins. [4/19/02] 2002 MTWCC 24 Insurers have a duty to accurately inform claimants of the nature and purpose of any medical examination arranged by the insurer, as well as the specialty of the examiner. Failure to properly inform a claimant of those matters may result in the Court excluding evidence regarding the examination and the opinions of the examiner.

Alocco v. CIGNA [12/06/00] 2000 MTWCC 74 Where the insurer denies liability for medical services and claimant pays for those services, in whole or in part, and the insurer is later found liable for the services, the insurer has a duty to assist claimant in seeking repayment from the medical providers.