Hartford Acc. & Indem. Co. v. Fidelity & Guar. Ins. Underwriters, Inc., 810499

• Decision Date: 18 June 1982
• Docket Number: No. 810499,810499
• Citation: 223 Va. 641,292 S.E.2d 327
• Court: Virginia Supreme Court
• Parties: HARTFORD ACCIDENT & INDEMNITY COMPANY v. FIDELITY & GUARANTY INSURANCE UNDERWRITERS, INCORPORATED. Record

Page 327

292 S.E.2d 327

223 Va. 641

HARTFORD ACCIDENT & INDEMNITY COMPANY v. FIDELITY & GUARANTY INSURANCE UNDERWRITERS, INCORPORATED.

Record No. 810499.

Supreme Court of Virginia.

June 18, 1982.

Harold M. Walker, Jr., Falls Church (Mountfort, Furr, Dowler & Jackson, Falls Church, on brief), for appellant.

William M. Sokol, Frederickson (R. Scott Pugh, Sokol, Ledbetter & Haley, Fredericksburg, on brief), for appellee.

Before CARRICO, C. J., and COCHRAN, POFF, COMPTON, THOMPSON, STEPHENSON and RUSSELL, JJ.

POFF, Justice.

In this appeal, the appellant insurance company concedes that it owes coverage on a workmen's compensation claim but contends that, contrary to the Industrial Commission's award, the appellee insurance company is jointly liable. We affirm the award.

Appellee Fidelity Guaranty & Insurance Underwriters, Incorporated, issued the employer an insurance policy effective February 22, 1979. The policy period was scheduled to expire February 22, 1980, but Fidelity renewed the term for another year. ¹ On April 1, 1980, Fidelity notified the employer that its policy was cancelled for non-payment of premium effective April 11, 1980. However, Fidelity failed to notify the Commission as required by Code § 65.1-105. ² Shortly after the employer received notice of cancellation, it obtained an insurance binder from appellant Hartford Accident & Indemnity Company. Hartford's binder was in full force and effect on June 2, 1980, the date of the industrial accident out of which this controversy arose.

The injured employee filed a claim, and the hearing commissioner entered an award against both Fidelity and Hartford. Upon its own motion, the full Commission convened a hearing "to resolve the coverage question". In a final award, the Commission ruled that Hartford alone was liable.

Hartford maintains that Fidelity's failure to comply with the statutory notice provisions defeats its attempt to cancel its policy, that coverage under that policy remained in effect on the date of the industrial accident, and that Fidelity is jointly liable on the employee's claim.

Hartford raises a question of first impression in this Court. Because of the diversity of statutory provisions and judicial opinions in other jurisdictions, we find little foreign authority to guide us in our decision. Neeman v. Otoe County, 186 Neb. 370, 183 N.W.2d 269 (1971). Our decision rests upon what we perceive to be legislative intent.

Our analysis begins with the premise, repeatedly affirmed in our decisions, that the Workmen's Compensation Act was adopted for the protection of workers and their dependents. An employer subject to the Act must be and remain insured or self-insured. Code § 65.1-104.1. Code § 65.1-105 recognizes an insurer's right to cancel coverage for business reasons, but it requires the insurer to postpone the effective date of cancellation for a period of 10 or 30 days. The notice and delay requirements serve two functions. They give the employer...