Insurance Agency Must Pay $5.8 Million to SoCal Firm

July 16, 2007

An insurance agency must pay $5.8 million to a small business that discovered it lacked workers’ compensation coverage after a burned employee sued.

An agent for Hilb, Rogal and Hamilton Insurance Services improperly failed to tell the company that it wasn’t covered, a Los Angeles County Superior Court judge found. On July 2, he ruled in favor of John Williams and Steven Simon, owners of Rhino Linings Santa Fe Springs.

The company lines pickup trucks with plastic.

The suit by the owners said they only learned about their lack of coverage after a jury in 2004 found against them in a personal injury suit. They were ordered to pay $5.6 million to an employee who suffered second- and third-degree burns in an explosion.

Another insurer paid $1 million but the remainder, including interest, totaled $5.8 million.

Hilb, Rogal and Hamilton claimed their agent told Rhino owners they should get workers compensation insurance and they didn’t want it, “but there was never anything in writing to indicate that,” said Patrick Vastano, the attorney for the owners.

A call to the attorney who represented the insurance agency in the case was not immediately returned.

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