Posted on: June 23, 2010
As a North Charleston personal injury lawyer I would like to share with you the case summary of Crews v. Liberty Mutual.
In a recent case, the South Carolina Court of Appeals issued a decision about when an insurance carrier may properly cancel an insurance policy. Crews v. Liberty Mutual Insurance Corp., No. 4735 (S.C. Ct. App. Sept. 1, 2010). In this case, the company W.R. Crews, Inc. carried workers’ compensation coverage through Liberty Mutual Insurance Corporation. Each year, the insurance company would issue a new policy, rather than renewing the old policy. The premiums that W.R. Crews, Inc. paid for the coverage were only approximate. After submitting payroll records at the end of the year, Liberty Mutual would calculate the true premiums and bill W.R. Crews, Inc. for the difference. In this case, there was dispute over whether W.R. Crews Inc. submitted the proper payroll documentation in a timely manner. As a result, Liberty Mutual sent notice that it was cancelling coverage of the current year’s insurance policy, even though the noncompliance with audit requests related to the previous year’s policy.
Shortly after the notice of cancellation, Mr. Crews was injured on the job while working for W.R. Crews, Inc. Liberty Mutual denied coverage because it had canceled the policy before the date of Mr. Crews’ accident. The Court of Appeals upheld the circuit court’s holding that Liberty Mutual’s cancellation of the policy was ineffective. In essence, the court held that Liberty Mutual was responsible for providing workers’ compensation benefits to Mr. Crews.
The court reasoned (1) that Liberty Mutual could not cancel Crews’ current policy because of auditing difficulties with his prior policy and (2) that Liberty Mutual could not cancel either policy without giving Crews a reasonable opportunity to cure any alleged noncompliance. As a work injury lawyer in South Carolina , I was happy with the outcome of this ruling since so often the insurance companies get away with canceling people’s policies when it was not deserved.