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Arnett & Arnett, PC June 15, 2018

There are numerous exclusions to the coverage provided to businesses in a comprehensive general liability or CGL policy. Exclusion E — Employers Liability — in the standard form CGL policy results in a lack of coverage under the CGL policy for liability arising from an injury to an employee.

”Bodily injury” to:

(1) An employee of the insured arising out of and in the course of employment by the insured; or

(2) The spouse, child, parent, brother or sister of that employee as a consequence of (1) above.

This exclusion applies:

(1) Whether the insured may be liable as an employer or in any other capacity; and

(2) To any obligation to share damages with or pay someone else who must pay damages because of the injury.

This exclusion does not apply to liability assumed by the insured under an ”insured contract.”

Thus, separate employer liability coverage should be considered to protect an employer against liability arising from the following kinds of actions:

  • Actions by employees for damages from work-related injuries if workman’s compensation coverage is not mandated by law, such as for agricultural or domestic service employees in some states;

  • Actions by members of an injured employee’s family for loss of companionship; and

  • Cross-actions by a defendant sued by an employee in which the defendant claims liability should be assessed in whole or in part by the employer.

Separate employer liability coverage also should be considered to protect a business against claims of employees that are not covered by workman’s compensation coverage. An employee’s work-related injury normally will be handled under workman’s compensation, but some employee injuries may be injuries which could have occurred to the employee either as an employee or as a member of the public. For example, a slip and fall of an employee working in a retail store could be the subject of a non-workman’s compensation claim against the employer.