General Reinsurance Corp. v. St. Jude Hospital

In this case an injured employee obtained a 10 percent increase in her workers’ compensation award under Labor Code section 5814 because her self-insured employer unreasonably delayed or refused payment of benefits. The employer’s excess insurance carrier obtained a judgment declaring it was not required to reimburse the employer for the 10 percent increase because the policy excluded indemnification for payments made in excess of “benefits regularly required by the Workers Compensation Law” if such benefits were required because “the Insured violated or failed to comply with any Workers Compensation Law.” The employer contends the exclusion does not apply to section 5814 benefits and the exclusion is too ambiguous and overbroad to be enforceable. We disagree and affirm.

Facts and Procedure

The Policy

St. Jude Hospital self-insures for workers’ compensation. General Reinsurance Corporation is St. Jude’s excess insurance carrier. The General Reinsurance policy provides St. Jude indemnification for losses over $300,000 and defines a “loss” as “amounts actually paid by the Insured as a self-insurer under the Workers Compensation Law.”

Section D of the General…