Court holds insurer must reimburse another insurer based on estoppel theory
State Farm appealed a Workers Compensation Agency decision that required it to pay comp to an injured employee insured. State Farm argued that its agent did not properly write coverage and that equitable estoppel arguments cannot be used to justify insurance coverage. Although State Farm's argument has been upheld when insureds claim insurance "by estoppel" (by inducement or misrepresentation, essentially) the Court held that another insurer can use the argument to avoid assuming the duty of coverage. The Court of Appeals held that the WCAC properly held State Farm responsible for coverage under a purportedly erroneous certificate of coverage and refused to pass the comp responsibilty on to a successor insurer.