| Q&A of the Week |
Social or Recreational Activity and WC
A Wyoming subscriber recently asked the following question:
An employee was attending a party sponsored by his employer after working hours. The employer catered food and soft drinks but no alcoholic beverages. However, some employees purchased beer and alcohol and set up an area outside the employer's building on the public sidewalk for the employees to drink if they chose to do so. After drinking several bottles of beer, the employee got into a fight with another employee and was seriously injured. The injuries kept the employee from returning to work. The employee then sought workers compensation benefits.
Is the injured employee entitled to WC benefits considering his injuries probably arose from drinking alcohol?
ANSWER: Various courts have held that in order to determine whether an employee's participation in social or recreational activities is job-related, the following items should be considered: whether the activities occur on the employer's premises during a social or recreational period as a regular incident of employment; or, whether the employer, by expressly or impliedly requiring participation or by making the activity part of the services of the employee brings that activity within the orbit of employment; or, whether the employer derives substantial direct benefit from the activity beyond the intangible value of improvement in the employee health and morale that is common to all kinds of recreation and social life.
Based on your description of the incident, the employer did not sponsor the drinking of alcohol or serve alcohol, and the actual drinking and fight occurred on a public area, not in the employer's building. Moreover, the employer certainly did not derive any benefit from the drinking and fighting among employees. It is our opinion that the employee was not injured as a result of employment; that is, there was no causal connection between the employment and the injury and the injury did not arise out of and in the course of employment. So, the employee should not receive WC benefits.
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ISO Homeowners Comprehensive Form, HO 00 05
Insurance Services Office (ISO) introduced form HO 00 05 10 00, which provides open perils coverage for personal property as well as buildings, in the 2000 forms revision. Read More |
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| Litigation Watch |
Misrepresentations Void Coverage
The insurer brought an action against the insured for a declaratory judgment that the crime policy was void due to misrepresentations in the application. This case is Georgia Casualty & Surety Company v. Valley Wood, 783 S.E.2d 441 (2016).
The evidence introduced at trial showed that the co-owner of Valley Wood obtained insurance coverage with Georgia Casualty through the insurance agent, Lanier. It is undisputed that the insurance application submitted by Lanier to the insurer were not signed. In fact, the co-owner of Valley Wood, Ramey, testified that he did not see the application and that he was never asked questions by anybody pertaining to the application. An underwriter with Georgia Casualty testified that he received the application through an e-mail form the Lanier agency and that he would have rejected the application for crime coverage if the app had stated that Valley Wood did not audit with a certified public accountant and did not require countersignatures on checks. The underwriter also said that this decision was based on the applications. Read More
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| Fraud of the Week |
Auto Fraud – Washington
AMOUNT: $5,600
A woman involved in a collision filed claims for injuries from the accident and received $5,600. She had actually had the claims paid for by her medical insurance. Read More
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