An insurer does not have to defend an Indiana employer against a wrongful death claim, a federal appeals court ruled on August 4, 2026.
The US Court of Appeals for the Seventh Circuit affirmed that Insurance Company of the West (ICW) owes no defense or coverage to High Performance Alloys, Inc. (HPA) in a lawsuit over an employee's death. ICW had sold HPA a Worker's Compensation and Employers' Liability policy covering October 1, 2021 to October 1, 2022.
During that window, an HPA worker was killed at the company's facility. The worker's estate sued for wrongful death in state court, where the case is still open.
The policy covered "bodily injury by accident" but excluded two things: any obligation imposed by "a workers compensation... law," and "[b]odily injury intentionally caused or aggravated by you." Those two exclusions did the work.
The estate claimed HPA knew its equipment was dangerous, brushed off prior warnings, and left known hazards unfixed. The complaint pointed to a "serious violation" from the Indiana Occupational and Safety Health Administration over "ineffectively guarded equipment," and alleged HPA "acted with actual intent to cause injury" to the worker.
That claim boxed in the policyholder. The court spelled out the bind: if HPA meant to cause the death, the intentional-acts exclusion applied. If it didn't, the death was an "accident" that fell under Indiana's Workers' Compensation Act - which the policy also excluded. No path led to coverage.
Indiana law, the court noted, treats an injury as happening "by accident" only when neither the worker nor the employer intended it. Allegations about known dangers and past violations pointed to negligence or recklessness, not the "actual knowledge that an injury is certain to occur" needed to show intent.
HPA wanted the question sent up to the Indiana Supreme Court. The judges declined, saying the state's precedent already answered it.
The takeaway for carriers: paired worker's comp and intentional-act exclusions can leave a policyholder with nowhere to stand when a workplace death lands in litigation.
