A federal appeals court affirmed a lower court ruling Wednesday and held that RLI Insurance Co. must pay a $2.4 million settlement to a worker who lost both legs following an accident and did not have workers compensation coverage.

in June 2014, Ryan Marshall was seriously injured while working as a truck driver at a plant in Duquesne, Pennsylvania, when the accident occurred, according to the ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in P.I. & I. Motor Express, Inc. v. RLI Insurance Co.

"Mr. Marshall had stepped out of his flatbed truck when others were loading large metal pipes onto it,” according to the ruling. “A worker accidentally ran a forklift into the pipes, causing one of them to dislodge and roll off the truck. The pipe crashed into Marshall as it fell.”

Doctors had to amputate both of Mr. Marshall’s legs, leaving him totally disabled, according to the ruling.

A state agency found that Masury, Ohio-based P.I. & I. Motor Express was the driver’s “statutory” employer in terms of workers compensation, but because the company had not obtained workers comp coverage for him, Mr. Marshall could sue it under tort law, according to the ruling.

RLI, Motor Express’ commercial general liability insurer, agreed to defend the company under a reservation of rights, and the parties settled the suit for $2.4 million.

After RLI refused to reimburse it for the settlement, Motor Express filed suit against the insurer in U.S. District Court in Youngstown, Ohio, seeking indemnification for the settlement up to the CGL insurance policy’s $2 million limit.

The district court ruled in Motor Express’ favor. On appeal, RLI argued in part that a workers compensation exclusion applied, but a three-judge appeals court panel affirmed the lower court’s decision.

The case “turns on the question whether this settlement ‘obligation’ was ‘under’ Pennsylvania ‘workers compensation’ law. It was not,” the ruling said.

“The $2.4 million settlement arose from a suit that Marshall brought against Motor Express under Pennsylvania’s common law of torts.  So the commonwealth judge-made tort law — not its statutory workers’ compensation law — is what gave Marshall the ability to seek the money (and what gave Motor Express the duty to pay it),” the ruling said.

Motor Express attorney Amanda Leffler, a partner with Brouse McDowell LPA in Akron, Ohio, said in a statement that the decision represented “a significant win for policyholders.”

“Prior to this case, other courts nationally had broadly construed the Workers’ Compensation exclusion for a variety of reasons not applicable to our case,” she said.

“Here, however, the Sixth Circuit properly rejected the insurer’s attempts to stretch the exclusion beyond its plain and commonly understood meaning.”

The insurer’s attorneys did not respond to a request for comment.