In a case of first impression, the Appellate Division, First department affirmed an order confirming two arbitration decisions awarding Petitioner, Emerald Claims Management as t/p/a for ULLICO Casualty Insurance Company, reimbursement from Respondent, A. Central Insurance Company, pursuant to the loss transfer provisions of Insurance Law § 5105, despite Respondent’s disclaimer of coverage based on its insured’s non-cooperation.
Petitioner, represented by Jones Jones LLC, sought reimbursement for Workers’ Compensation benefits paid to its insured in lieu of No-Fault benefits in connection with a motor vehicle accident that occurred in the course of its insured’s employment. At arbitration, Respondent was found 100% liable for the accident and Petitioner subsequently sought confirmation of the awards with the Supreme Court. Respondent opposed the petition based on its disclaimer of coverage for the accident due to its insured’s failure to cooperate with Respondent’s investigation of the underlying accident. The Supreme Court affirmed the underlying arbitration decisions on the ground that Respondent’s disclaimer of coverage is not binding on innocent third parties. Respondent appealed the Supreme Court’s decision to the Appellate Division, First Department. In affirming the Supreme Court’s decision, the Appellate Division held that the Respondent’s disclaimer based on non-cooperation had no bearing on Petitioner’s entitlement to loss transfer reimbursement pursuant to Insurance Law § 5105, since an insurer’s right to such reimbursement “is separate from the personal right of the insured tortfeasor (and his heirs, assignees, or subrogees) to receive a defense and indemnification from respondent.”
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