Workers' Compensation: Limited Liability Corporation Is Bound by Election of Coverage for Members

The NJ Appellate Division ruled that the members of a Limited Liability Corporation had an affirmative responsibility to elect workers' compensation coverage. Since the corporation failed to do so, liability cannot be shifted to the Workers' Compensation insurance producer or the insurance company.

In a case that spanned almost two decades and four compensation judges, the Court ruled that a Limited Liability Corporation [LLC] must provide an affirmative election of coverage for its members at the time of the purchase of the policy or its renewal.

Dorothy T. Day, Esq.
Counsel for the Respondent/Employer

The LLC specifically rejected coverage on the Notice of Election Form at the time of the purchase of the policy, and they incompletely enumerated the members of the LLC as employees, the injured corporate member was barred from asserting a claim for workers' compensation benefits.

Additionally, the insurance producer testified that the LLC has not requested coverage of its members even though the policy producer informed the LLC of the consequences of not electing coverage for the corporation's members.

The Court reasoned that even though the Workers' Compensation Act was to be liberally applied, the statutory language regarding coverage must be precisely adhered to. N.J.S.A. 34:15-36.

Kearton v. E.W. Millwork, LLC, Docket No. A-1426-20, 2022 WL 244043, decided January 27, 2022

Dickie McCamey & Chilcote, PC, attorneys for appellant (Dorothy T. Daly, of counsel and on the briefs; Michelle D. Gasior, on the briefs).

Stephen D. Berryhill, attorney for respondent.

Before Judges Sumners and Vernoia.

UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties, and its use in other cases is limited. R. 1:36-3. Superior Court of New Jersey, Appellate Division.

Recommended Citation: Gelman, Jon L., Limited Liability Corporation Is Bound by Election of Coverage for Members, Workers' Compensation Blog Jan. 28, 2022), https://workers-compensation.blogspot.com/2022/01/limited-liability-corporation-is-bound.html

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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (Thomson-Reuters). For over 5 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Blog: Workers ' Compensation

Twitter: jongelman

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