Employers sometimes have more than one workers’ compensation policy that provides coverage for the same loss. When more than one policy covers a loss, the employer may have an incentive to intentionally tender the claim to one insurer and not the other. This is called selective tender. When the insured makes a selective tender, can the “chosen” insurer seek contribution from the non-chosen insurer? Yes, in Massachusetts.
The Supreme Judicial Court, on a question certified to it by the First Circuit Court of Appeals, recently held in Insurance Co. of the State of Pennsylvania v. Great Northern Insurance Co., 473 Mass. 745 (2016), that an employer’s selective tender of a claim to one of its insurers did not foreclose the insurer from obtaining an equitable contribution from the other insurer to whom the claim was not tendered. The ruling rejects the minority of jurisdictions that have recognized a selective tender exception to equitable contribution doctrine.
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