Interesting Bad Faith UM Issue

Client is EMT in back of ambulance when hit by tortfeasor. After settling with the tortfeasor he finds out EMSA has UM that covers employees. UM now denies coverage saying that its subrogation was destroyed by the settlement and release. Client did not know of the employer’s coverage at time of settlement and release with tortfeasor. EMSA notified its carrier of the accident and of injury to an employee but the insurance did not notify the employee of the policy benefit. They have filed an MSJ and response due shortly.

Check out Phillips v. New Hampshire Ins. Co., 263 F.3d 1215 (10th Cir. 2001). Facts are very much like yours: employee didn't know about employer's UM coverage. Tenth Circuit held the employee didn't give up the employer's UM by releasing tortfeasor because he didn't know there was UM.