SAN FRANCISCO—A jury awarded $1.13 million on Monday to a medical group alleging that California’s State Compensation Insurance Fund unfairly excluded it from its network of medical providers.

The decision in Palm Medical Group vs. State Compensation Insurance Fund could encourage other medical providers across California to sue San Francisco-based SCIF for excluding them from its network of providers treating injured workers, said Drew Pomerance, a partner at Roxborough Pomerance & Nye L.L.P. in Los Angeles.

Other insurers, though, are not likely to face lawsuits with a similar argument as that heard by a San Francisco jury, noted Mr. Pomerance, who represented Fresno, Calif.-based Palm Medical. In the case at hand, the plaintiffs argued that by excluding Palm, SCIF violated the common law doctrine of fair procedure.

That doctrine applies only when a business has substantial economic power in a market, which SCIF does because it insures more than 50% of California’s workers, Mr. Pomerance said. Other insurers do not have such a large share of the state’s workers comp market.

SCIF argued that it excluded Palm Medical because the medical group mishandled claims and provided poor patient care.