The Self Employed Driver, Work Comp & No-Fault

Saturday, February 25, 2006 | 0

SELF-EMPLOYED DRIVER TURNED DOWN BY WORKERS COMP BOARD IS ENTITLED TO NO FAULT BENEFITS

Global Liberty Insurance Company v. Tarek Abdelhaq (unreported) (Supreme Court, Nassau County, Index no. 17651/2005) (BRANDVEEN, j)

Abdelhaq was an owner/operator of a car service vehicle, insured by Global. After his taxi was hit by another car, Abdelhaq applied to Global for no-fault benefits. Global denied the claim on the grounds that workers compensation insurance should be primary, and took the position that a formal denial from the workers compensation board was necessary before a no-fault claim would be honored.

Abdelhaq filed a claim with the workers compensation board, and the Board responded in writing that because Abdelhaq was self-employed he was not required to carry workers compensation insurance, he was not eligible for comp benefits and that no hearing would be held on the issue.

Abdelhaq provided Global with a copy of the Board's letter, but Global still refused to pay no-fault benefits. Abdelhaq filed a demand for no-fault arbitration and Global brought this Petition to stay arbitration.

The Court held that the condition precedent to no-fault coverage was satisfied by the insured's application to the WCB for benefits and the WCB's denial. Thus, the Petition was denied. In addition, the Court ordered the driver to provide Global with "all necessary discovery" provided for by the insurance policy, including medical authorizations, submission to IMEs, and depositions.

Comment: This is an interesting anomaly in the law, where a driver who is working at the time of an auto accident is entitled to no-fault benefits instead of workers comp. It would appear, then, that a self-employed driver with no employees is not required to carry workers compensation insurance and may turn to his livery policy for no-fault benefits in the event of an accident.

Article by Larry Rogak. Lawrence N. Rogak is an insurance defense attorney in New York. He writes The Rogak Report, a daily insurance law newsletter, and his insurance law articles appear in several industry publications. For more information see www.Rogak.com.

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