Zurich: Comp Claim Void Because Employer Didn't Disclose Plane That Crashed

Wednesday, March 27, 2019 | 0

A construction-equipment wholesaler that lost almost its entire corporate leadership in a plane crash in December now faces a lawsuit from Zurich American over the workers' compensation claim, charging that the company did not disclose that it owned or operated any aircraft.

Wei Chen

Memphis-based Sunshine Enterprise lost its CEO, Wei Chen, and four other top officials in the crash of the small plane near Atlanta on Dec. 20. This week, Zurich American filed a lawsuit, asking a judge to void the workers' comp death benefits claims because the insurer was not aware of the company's interest in the aircraft, according to a news report.

"In determining whether to provide Sunshine with workers' compensation insurance and the cost of such insurance, Zurich had to assess the risk of loss for such coverage," the complaint reads. "Sunshine's actions in owning, operating or leasing (an) aircraft increased Zurich's risk of loss."

The Cessna aircraft that crashed was registered to Chen, who was also the pilot, the Memphis newspaper reported. The local insurance agency that helped connect Sunshine with Zurich also was named in the suit, which argues that if the claim is not voided, the local agency should be held liable for paying the benefits.

Sunshine, with more than 400 employees, was considered a leader in the Memphis business community. It managed sales and distribution of Chinese-made construction and industrial equipment, and had several subsidiaries across the country, the company's website notes.