National Fire Insurance Company of Hartford v. Beaulieu Company, LLC, 140 Conn. App. 571 (2013).

Jan 01, 2013

OUTCOME:

Conway Stoughton represented National Fire Insurance Company of Hartford in an action seeking recovery of premium owed under a workers’ compensation and employer’s liability insurance policy after comp ... letion of a standard policy audit of the insured’s business enterprise. The insured disputed the audit and refused to pay the premium the insurer claimed was owed on the basis that the premium calculation was flawed, claiming that payments made by it to its independent contractors during the policy period should not have been included within the premium basis on the grounds that they did not pose a risk under the policy due to these individuals’ inability to pursue benefits under the Workers’ Compensation Act. The trial court ruled in favor of the plaintiff insurer in its effort to recover unpaid premiums for workers’ compensation insurance coverage. The insured then pursued an appeal. Attorney Chapps from Conway Stoughton, representing the insurer, was also successful on appeal. The Appellate Court addressed the import of the categories of persons whose remuneration the carrier may include in its premium basis. In reaching its decision, the Appellate Court determined that the workers in question fell within the penumbra of the insurance policies because they engaged in work that could make the insurance carrier liable to provide workers’ compensation benefits. In fact, the Court held that the insurance carrier was entitled to assess a premium based on its risk of having to cover certain employees even if it could later be determined that they were ineligible for workers’ compensation as employees. The Appellate Court’s analysis of the workers’ compensation policy language at issue was the first Connecticut appellate authority on the issue. Prior to this decision, the only Connecticut authority on point was a 1964 Circuit Court decision. National Fire was a significant holding for insurers in Connecticut because it established much needed clarity in the law, providing the necessary authority for insurance carriers to recover insurance premiums after audit based on the risk assumed under the policy. This decision set new precedent in Connecticut and was obtained through the Attorney Chapps’ ability to see the totality of the issue and to pursue it not only at the trial court but to also persevere at the appellate court. Attorney Chapps’ command of insurance precedent, insurance policy provisions and the application of germane workers’ compensation law allowed him to obtain this significant insurance law decision. This decision will have tremendous impact moving forward as it will act as precedent for the many similarly situated cases in the future.