Insurance Should Never Apply to Indemnify Insured for its Intentional Acts
Post 4838
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Slyvia Melania Tejada de Tapia was injured at work and filed a workers’ compensation claim against her employer, 74 Industries, Inc. (74 Industries), which was settled pursuant to an order approving settlement with dismissal under statute called the Section 20 Settlement resulted in the dismissal of plaintiff’s workers’ compensation claims with prejudice. Workers’ Compensation is an exclusive remedy for an employee injured at work without fault.
In Sylvia Melania Tejada De Tapia v. 74 Industries, Inc. and Velcro USA, Inc., et al. v. New Jersey Manufacturers Insurance Company, No. A-2643-21, Superior Court of New Jersey, Appellate Division (July 12, 2024) the Appellate Division explained why workers’ compensation has no effect on tort law.
FACTS
Plaintiff suffered an injury after she was bitten or stung by an insect during the course of her employment as a sewing machine operator with 74 Industries. According to plaintiff, insects routinely infested the packages of fabric and materials that employees handled and frequently bit and stung employees. Plaintiff was hospitalized for treatment related to the infection she suffered as a result of the insect bite. The infection caused her right leg to swell and form green open sores.
New Jersey Manufacturers Insurance Company’s (NJM) had issued a standard workers’ compensation insurance policy (the Policy) to 74 Industries and recommended settlement of plaintiff’s workers’ compensation claim. Prior to the settlement, however, plaintiff had also filed a complaint in the Law Division alleging intentional torts against 74 Industries. 74 Industries filed a third-party complaint against NJM seeking coverage under the Policy for plaintiff’s claims of intentional wrong asserted against 74 Industries. NJM denied coverage citing policy exclusions for intentional torts and moved to dismiss 74 Industries’s third-party complaint. The Law Division judge granted NJM’s motion to dismiss 74 Industries’s third-party complaint for failure to state a claim.
NJM defended 74 Industries in workers’ compensation court and eventually recommended 74 Industries settle plaintiff’s case for a lump sum payment of $25,000 by way of an order approving settlement with dismissal.
Prior to the entry of the Section 20 settlement, however, plaintiff had filed an action in the Law Division alleging her injuries were caused by 74 Industries’s intentional misconduct under the principles explained by the Court in Laidlow v. Hariton Mach. Co., 170 N.J. 602, 14 (2002).
Plaintiff had filed a series of amended complaints, each of which included the same four counts against 74 Industries.
The court further found that plaintiff’s allegations fell squarely within the Policy’s C5 exclusion for “intentional wrongs” and rejected 74 Industries’s contention the Policy was ambiguous because the C7 exclusion and C7 endorsement provided coverage for “bodily injuries” under Part Two of the Policy.
DISCUSSION
The interpretation of an insurance policy, like any contract, is a question of law. In attempting to discern the meaning of a provision in an insurance contract, the plain language is ordinarily the most direct route. The plain and unambiguous language in the C5 endorsement clearly covers plaintiff’s intentional tort claims that result from a subjective intent to injure and those that are substantially certain to have caused injury.
As the motion court acknowledged, plaintiff asserts that she was threatened with adverse employment action if she left the jobsite for medical treatment, which based on a fair reading of the complaint suggests a cause of action for coercion. Defendant’s claim that it is entitled to coverage under the C7 exclusion fails because plaintiff’s causes of action are founded on intentional wrongs.
Lastly, the Appellate Division rejected 74 Industries’s argument that public policy supports coverage for intentional wrongs as New Jersey courts have consistently held that exclusions for intentional wrongs contained in insurance policies are legally valid.
Therefore there was no basis to support 74 Industries’s argument that public policy favors coverage for plaintiff’s intentional wrongs filed in Law Division. Therefore the court could discern no basis to conclude NJM had a duty to defend or indemnify 74 Industries against plaintiff’s intentional wrong claims made in the Law Division fourth-amended complaint.
ZALMA OPINION
Insurance, by definition, only insures against fortuitous conduct, an accident. Intentional acts, like those pleaded by Ms. Tejada de Tapia are not fortuitous but intentional and not insurable. The insurer, to be safe, added an exclusion for intentional acts which made clear its position and the requirement of fortuity.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
