Opinion ID: 1856277
Heading Depth: 1
Heading Rank: 4

Heading: Are Claims Filed by Employees of the Group's Members Covered?

Text: The Association challenges the district court's finding that the Mission policy covered workers' compensation claims made by employees of the Group's members. To support its challenge, the Association points to the definition of employees in the policy. The policy defines employees to include any person performing work which renders the [Group] liable under the [Iowa Workers Compensation Act] for bodily injuries or occupational disease sustained by such person. Because section 515B.5(1)(b) provides that the Association shall be liable only to the extent of the insolvent insurance company's liability, the Association argues that only workers employed by the Group itself were covered. Consequently, the argument concludes, Mission, and therefore the Association, would not be liable for workers' compensation claims made by employees of the Group's members. The policy language, to say the least, is loose. But we, like the district court, find from the evidence that Mission and the Group understood and intended the policy to indemnify the Group for benefits paid to employees of its members. As the district court noted, [s]ection 87.4 ... and [191 Iowa Administrative Code 56.1(2)] recognized the purpose for the Group's existence was to provide reasonable conditions for self-insurance which would pay workers' compensation benefits due employees of members of an association such as the [Group]. The evidence discloses that the [Group] itself had only one or two employees and these were office workers. It hardly can be contended seriously that the [Group] paid a premium of $112,000 to cover only one or two office employees. Because this is an equity case, we apply equitable principles. A single maxim answers the Association's contention: Equity regards substance and intent, rather than form, to prevent injustice. Federal Land Bank of Omaha v. Bollin, 408 N.W. 2d 56, 62 (Iowa 1987). We agree with the district court's analysis and conclusion that the claims by employees of the Group's members were covered by the Mission policy.