AIG/AIU INS. CO. V. SOUTH AKERS MINING CO.
WORKERS COMP – Liability for Safety Violation
This case resulted from a mine roof fall in which the miner was killed, leaving his spouse and child as dependents. The ALJ found that South Akers Mining had willfully violated safety regulations which resulted in the accident, and assessed a 30% penalty which increased the dependents’ benefits accordingly. The workers’ compensation insurer argued that according to the terms of its contract it should not be required to pay the penalty assessed against the employer. The Court rejected this argument, holding that the insurer is responsible for all of the employer’s liability under the statute. The Court reviewed the “trade-off” implicit in workers’ compensation coverage, the worker accepting defined benefits under the law regardless of fault whereas the employer enjoys immunity from civil liability including liability for pain and suffering and a limited liability for punitive damages in the form of the safety penalty.