FIRST DIVISION
May 16, 2005

JUSTICE GORDON delivered the opinion of the court:

Plaintiff, Lenny Szarek, Inc. (Szarek) appeals the grant of summary judgment to defendantMaryland Casualty Company (Maryland) on its counterclaim for declaratory judgment. Szarekcontends the circuit court erred in concluding that the territoriality provisions of Maryland'sinsurance policy precluded coverage for a worker's compensation claim filed in Illinois and thatthe lack of coverage was clear to the point that Maryland was not even required to provide adefense against such a claim. We agree with Szarek and reverse.

FACTUAL BACKGROUND

Szarek's and Maryland's pleadings reveal the following undisputed facts.

Szarek is a carpentry contractor and an Illinois corporation, headquartered in McHenryCounty. We take notice that McHenry is one of Illinois' northernmost counties, sharing a borderwith the State of Wisconsin. Szarek does business in both Illinois and Wisconsin.

On June 23, 1994, Maryland issued a policy of worker's compensation insurance toSzarek, with coverage retroactive to May 23, 1994, and continuing through June 23, 1995. Maryland's policy provided: "We will pay promptly when due the benefits required of you by theworkers compensation law." The policy defined "workers compensation law" as follows: "Workers Compensation Law means the workers or workmen's compensation law andoccupational disease law of each state or territory named in item 3.A. of the Information Page." Only one state was listed in item 3.A. of the information page: Wisconsin.

Szarek also entered into a separate employer's liability pooling agreement, a form of self-insurance, covering the same period of time as the Maryland policy. The agreement also providedthat workers' compensation benefits would be paid "when due the benefits required of you by theworkers' compensation law." However, the agreement defined "the workers' compensation law"as "the workers' or workmen's compensation law and occupational disease law of Illinois." Theagreement appointed Management Services, Inc. (also known as Risk Management Association,and hereinafter referred to as RMA) as its administrator.

On November 7, 1994, Thomas Cholewinski, a Szarek employee, was hurt while workingin Kenosha, Wisconsin. Cholewinski was an Illinois resident and filed his worker's compensationclaim in Illinois. Szarek tendered this claim to RMA. RMA, unaware of the existence of theMaryland policy at the time, began to pay benefits and incur expenses on the claim in the amountof $33,412.80.

When RMA became aware of the Maryland policy, it tendered the claim to Maryland onJanuary 19, 1996, for ongoing administration, and sought compensation for the benefits it hadpaid and the costs of administration it had incurred. Maryland, however, denied any liability forCholewinski's claim on March 8, 1996, explaining it would "not be able to provide benefits on ***[the] claim under *** [its] workers' compensation policy issued for the State of Wisconsin." Cholewinski subsequently filed for an adjustment of his claim before the Illinois IndustrialCommission, naming Szarek and Maryland as defendants. Maryland did not participate in theproceeding, however, and the final settlement of $22,980.75, reached on April 15, 1997, was paidout of the self-insurance pool. All told, Szarek, through its contributions to the self-insurancepool, paid $69,316.01 for benefits to Cholewinski and for defense against his claim.

Litigation over Maryland's denial of coverage commenced in the law division of the circuitcourt of Cook County sometime in 1999,⁽¹⁾ originally between RMA and Maryland, but laterbetween Szarek and Maryland in the chancery division.⁽²⁾ Szarek's complaint alleged thatCholewinski's claim was covered under the Maryland policy, that Maryland had wrongfully failedto defend and indemnify Szarek for the claim, and that, as a result, Szarek paid for the costs ofdefense and workers' compensation benefits itself. In its answer to the complaint, Marylanddenied that Cholewinski's claim fell within the terms of the policy and therefore denied that itowed a defense and indemnification of his claim. Maryland also filed a counterclaim the same dayit filed its answer, seeking a declaration from the circuit court that it had no duty to defend orindemnify Szarek against Cholewinski's claim. Maryland conceded that Cholewinski had a validclaim under either Wisconsin or Illinois law, but nevertheless contended that its policy onlycovered claims brought in Wisconsin.

On June 30, 2003, Szarek moved the chancery court for summary judgment on itscomplaint. In response, Maryland cross-motioned for summary judgment on its counterclaim. Inits motion, Szarek contended that benefits were due under Wisconsin worker's compensation lawonce Cholewinski was injured in Wisconsin, and therefore Maryland owed coverage. Maryland,on the other hand, argued that the plain language of its policy limited coverage to claims filed inWisconsin. The chancery court denied Szarek's motion and granted Maryland's motion, stating"the Maryland worker's compensation coverage *** [does] not apply to the Illinois worker'scompensation claim *** As a result, Maryland had no obligation to defend Szarek; no obligationto indemnify Szarek and no obligation to make payments to Szarek ***." Szarek appeals.

II. ANALYSIS

The law is clear that summary judgment should be granted when "the pleadings,depositions, and admissions on file, together with the affidavits, if any, show that there is nogenuine issue as to any material fact" and the moving "party is entitled to judgment as a matter oflaw." 735 ILCS 5/2-1005(c) (West 2002). In this case, the parties present no factual disputesand instead argue over the legal question of the construction of an insurance policy. We reviewde novo both the construction of insurance contracts (State Farm Mutual Automobile InsuranceCo. v. Villicana, 181 Ill. 2d 436, 441, 692 N.E.2d 1196, 1199 (1998)), as well as grants ofsummary judgment (Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113, 649 N.E.2d1323, 1326 (1995)).

"To ascertain the meaning of *** [an insurance] policy's words *** [a] court mustconstrue the policy as a whole ***." Outboard Marine Corp. v. Liberty Mutual Insurance Co.,154 Ill. 2d 90, 108, 607 N.E.2d 1204, 1212 (1992). Unambiguous terms of a policy will beapplied as written, unless those terms violate public policy. Villicana, 181 Ill. 2d at 442, 692N.E.2d at 1199. Ambiguities in terms limiting or excluding coverage, however, will be construedagainst the insurer and in favor of the insured. Progressive Universal Insurance Co. of Illinois v.Liberty Mutual Fire Insurance Co., 347 Ill. App. 3d 411, 414, 806 N.E.2d 1224, 1227 (2004). Aterm is ambiguous when it is subject to more than one reasonable interpretation. Outboard MarineCorp., 154 Ill. 2d at 108, 607 N.E.2d at 1212.

On appeal, Maryland contends that under the language of the policy it is only liable fordefense and indemnification of worker's compensation claims as "required" by Wisconsin'sworker's compensation act, which it contends means that the claim must be filed in Wisconsin. Szarek, on the other hand, argues that "as required" under Wisconsin's worker's compensationlaw means that a claim should be evaluated and paid under Wisconsin law regardless of where theclaim is filed. Szarek therefore sees the provision not as limiting coverage to claims brought in aparticular forum, but rather as a choice of law provision limiting benefits to what would have beengranted under the state law specified in the policy. Szarek further contends that the law requiredMaryland to include an express exclusion in the policy for claims filed outside of Wisconsin, if thatwas Maryland's desired limitation of coverage, and that public policy demands the negation ofprovisions limiting the territorial reach of worker's compensation coverage.⁽³⁾

These issues, considered under virtually identical policy provisions as that at issue in thiscase, have produced two divergent lines of decisions. One line of cases agrees with Szarek thatalleged territorial limitation provisions are in fact choice of law provisions, not limiting coveragebased on where the employee chooses to file his claim, but only to restrict benefit eligibility and toset indemnification limits based on the state law specified in the policy . This line of casesincludes Smith & Chambers Salvage v. Insurance Management Corp., 808 F. Supp. 1492 (E.D.Wash. 1992); Sieman v. Postorino Sandblasting & Painting Co., 111 Mich. App. 710, 314N.W.2d 736 (1981); American Mutual Insurance Co. v. Duvall, 117 N.H. 221, 372 A.2d 263(1977); Toebe v. Employers Mutual of Wausau, 114 N.J. Super. 39, 274 A.2d 820 (App. Div.1971); Kacur v. Employers Mutual Casualty Co., 253 Md. 500, 254 A.2d 156 (1969); andWeinberg v. State Workmen's Insurance Fund, 368 Pa. 76, 81 A.2d 906 (1951). The other line ofcases agrees with Maryland that, for there to be coverage, the claim must actually be filed in thestate whose law is made to apply in defining the term "worker's compensation law." This line ofcases includes Travelers Insurance Co. v. Industrial Accident Comm'n, 240 Cal. App. 2d 804,809-10, 50 Cal. Rptr. 114, 118-19 (1966); Lumber Transport, Inc. v. International Indemnity Co.,203 Ga. App. 588, 590, 417 S.E.2d 365, 366-67 (1992); Foster Wheeler Corp. v. Bennett, 354P.2d 764, 768 (Okla. 1960); Consolidated Underwriters v. King, 160 Tex. 18, 20, 325 S.W.2d127, 129 (1959); Rood v. Nelson, 14 Misc. 859, __,178 N.Y.S.2d 969, 971 (1958); Jones v.Hennessey, 232 La. 786, 793, 95 So.2d 312, 314 (1957); Mandle v. Kelly, 229 Miss. 327, 345, 90So. 2d 645, 649-50 (1956); and Miller Brothers Construction Co. v. Maryland Casualty Co., 113Conn. 504, 519-20, 155 A. 709, 714-15 (1931). We perceive the more enlightened view to bereflected in those cases that find the plain meaning of policies providing that benefits will be paid"as required" under a specified state's worker's compensation law to only be a choice of lawprovision, and therefore find that Maryland must indemnify Szarek for the benefits paid toCholewinski and for the costs of defense against his claim. As a result of this conclusion, we neednot address Szarek's claim that Maryland breached its duty to defend.

We find the Pennsylvania Supreme Court's decision in Weinberg instructive. Mrs. Gotkin,the employee in Weinberg, was injured in Pennsylvania, but filed a worker's compensation claim inher home state of New Jersey. The State Workmen's Insurance Fund, under which the plaintiff, aPennsylvania business, was covered, provided that the Fund agreed to "assume the whole liabilityof this Insured Employer under the Workmen's Compensation Act of Pennsylvania." (Emphasis inthe origninal.) Weinberg, 368 Pa. at 80, 81 A.2d at 908. The policy further provided that itsliability for judgments was "confined to the liability arising under the Workmen's CompensationLaw, and not otherwise." Weinberg, 368 Pa. at 80, 81 A.2d at 908. The Weinberg court rejectedthe Fund's claim that the policy language rendered it liable only for claims filed in Pennsylvania,stating that that view "confuse[d] the Fund's liability for the payment of compensation duebecause of the injury to the employee, and its liability for the payment of a judgment obtained bythe employee in an action to enforce payment of compensation." Weinberg, 368 Pa. at 80; 81A.2d at 908. The court explained that at the moment Gotkin was injured she became eligible forPennsylvania benefits, simultaneously making the employer liable to pay compensation under thePennsylvania Act. Weinberg, 368 Pa. at 81; 81 A.2d at 908-09. Based on that consideration, thecourt found Gotkin's subsequent, fortuitous choice to file her claim in New Jersey did not impactthe employer's liability under the Pennsylvania act. Weinberg, 368 Pa. at 81; 81 A.2d at 909. Thecourt therefore concluded that under the Fund's policy, the Fund was liable to assume the defenseand indemnification of Gotkin's claim, but only as would have been granted under thePennsylvania Act, even allowing the complete denial of compensation if the injury would not havebeen covered under Pennsylvania law. Weinberg, 368 Pa. at 81; 81 A.2d at 909; accord Kacur,253 Md. at 509-10; 254 A.2d at 161-62.

In Kacur, the employer was a Maryland resident also doing business in Pennsylvania. Theemployee was injured in Maryland and filed his worker's compensation claim there. The insurerhad promised "to pay promptly when due all compensation and other benefits required of theinsured by the workmen's compensation law," and specified that the coverage "applie[d] to theWorkmen's Compensation Law *** of each of the following states: PENNSYLVANIA." Kacur,253 Md. at 502, n. 1, 254 A.2d at 157, n. 1. The Kacur court observed that a "contract ofinsurance coverage between the employer and his carrier[,] may *** be sufficiently broad as tocover the employer in all situations coextensive with the options open to the injured employeeunder applicable Workmen's Compensation Acts," so long as an insurer is only required toindemnify its insured for the amount allowed under the law of the state specified in the policy. Kacur, 253 Md. at 504-05, 254 A.2d at 158. Kacur criticized the holding of ConsolidatedUnderwriters v. King, a Texas appellate court decision concluding that a similar provisionrestricted coverage to claims actually filed in a particular forum, which in that case was Louisiana. The Kacur court noted Professor Larson's view that the provision in King merely served as achoice of law, not a coverage provision. Kacur, 253 Md. at 509, 254 A.2d at 161; see 9 A.Larson Workers' Compensation Law