Delaware’s top court has clarified when workers’ comp insurers can recover from underinsured motorist payouts after workplace accidents – a pivotal ruling for carriers.
On November 7, 2025, the Supreme Court of Delaware issued its decision in ProAssurance Grp. d/b/a Eastern Alliance Ins. Co. v. Edna Manz, a case that tackled the complex intersection of workers’ compensation and underinsured motorist (UIM) insurance. The outcome is set to influence how insurance carriers approach subrogation rights in cases where multiple insurance policies respond to a single workplace accident.
The case began when Edna Manz, an employee of Apis Services, Inc., was injured in a motor vehicle accident while acting within the scope of her employment. At the time, Apis Services had workers’ compensation coverage through ProAssurance. Following the accident, Manz filed a workers’ compensation claim and received $374,070.72 for medical expenses and lost wages, along with a lump sum of $80,000 for all future workers’ compensation entitlements. The settlement agreement between Manz and ProAssurance specifically reserved ProAssurance’s right to assert a lien against any recovery Manz might obtain from other insurance carriers as a result of the work accident.
Manz also recovered $8,571 from the at-fault driver’s insurance, but this amount was insufficient to cover her losses. She then filed a claim under her employer’s UIM policy, which was issued by Philadelphia Insurance Companies. This policy included a non-duplication clause, stating that no one would be entitled to receive duplicate payments for the same elements of loss and that the insurer would not pay for any loss already covered by workers’ compensation or similar laws.
After arbitration, Manz was awarded $215,000 under the UIM policy. ProAssurance asserted a lien on this award, arguing that Delaware law (21 Del. C. § 2363(e)) entitled it to subrogation for amounts it had paid in workers’ compensation benefits. Manz responded by seeking a declaratory judgment in the Superior Court, arguing that the non-duplication clause ensured she was only awarded monies not previously paid by workers’ compensation, and therefore, ProAssurance was not entitled to a lien on her UIM recovery.
The Superior Court sided with Manz, holding that the Delaware Supreme Court’s earlier decision in Horizon Services v. Henry (“Henry II”) did not apply, as it had not been decided when Manz resolved her claims with the UIM carrier. ProAssurance appealed the decision.
On appeal, the Delaware Supreme Court reversed the Superior Court’s ruling. The justices found that Henry II did apply, as it had been decided before Manz finalized her settlements with both ProAssurance and the UIM carrier. However, the Supreme Court clarified that Henry II does not grant workers’ compensation carriers a guaranteed right to subrogation on an employee’s UIM award. Instead, the right to subrogation is limited to “boardable” damages – those that can be introduced at trial under Delaware law. Damages that are covered by Personal Injury Protection (PIP) policies, referred to as “non-boardable,” are not subject to subrogation.
The Supreme Court remanded the case to the Superior Court for further proceedings to determine what portion, if any, of Manz’s UIM award is “boardable” and therefore subject to ProAssurance’s subrogation claim.
For insurance professionals, this decision underscores the importance of carefully reviewing policy language, particularly non-duplication clauses, and staying current with evolving state law on subrogation rights. As cases involving overlapping insurance claims become more common, understanding the boundaries of what can and cannot be recovered through subrogation is essential for effective claims management and compliance. The Delaware Supreme Court’s ruling provides valuable guidance for carriers navigating these increasingly complex scenarios.
