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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Workers’ Comp Suit Hits ACE Group Insurer

May 25, 2012 - A West Coast shipbuilder has sued Century Indemnity Co. in an effort to wrest payments from it to compensate workers who were hurt on the job in the 1970s.

National Steel and Shipbuilding Co. sued ACE-owned Century as successor to Cigna Specialty Insurance Co., which was once known as California Union Insurance Co.

California Union had issued three consecutive excess workmen’s compensation and employers’ liability policies to San Diego-based National starting Oct. 1, 1975. The first two years of policies carried limits of $2 million, subject to a retainer limit of $250,000, while the third year’s policy limit was set at $500,000 in excess of the same retained limit.

The third year’s policy, which the suit cited, said that Century agreed to indemnify National against losses as a result of injury by accident which National sustained because of compensation and other benefits required by the Workmen’s Compensation Law, specifically the U.S. Longshoremen’s and Harbor Workers’ Compensation Act.  

During those policy periods, National said that four employees were injured by accidents. By now, the company said that it has sustained losses in excess of its retained limits.

In two of the cases, National submitted requests for reimbursement in 2009 but was rejected, according to the Complaint. Century allegedly said that special fund assessments required of the company by the federal law were not “compensation or other benefits” required of National, and that by excluding those assessments, its client had not yet penetrated its retention layer.

In 2011, National,, submitted reimbursement claims for the other two cases. But Century has not responded, National alleged.

All four cases involved wrongful denials by Century, National alleged. These cases breached Century’s contractual duty to indemnify, National said. Further, National contended that Century has not dealt in good faith on several levels, including unreasonably denying the claims, misstating the application of law to its policies and failing to give at least as much consideration to the welfare of National as it did its own interests.

In its suit, filed in U.S. District Court for the Southern District of California, National asked that Century be ordered to compensate the plaintiff up to policy limits. It also asked for punitive damages.

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