CGL Policy Doesn't Cover Company that Disregards Safety
Originally published by: Business Insurance — March 18, 2015
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An insurer that covered employers under a commercial general liability policy isn't obligated to indemnify the employers if they're found liable in an injured worker's intentional tort claim, the Ohio Supreme Court ruled Thursday.
Duane Allen Hoyle was injured when he fell about 14 feet from a ladder-jack scaffold onto a concrete pad in March 2008, court records show. He was working on a construction project in Stow, Ohio, for DTJ Enterprises Inc. and Cavanaugh Building Corp. at the time.
A ladder-jack scaffold is typically secured with a bolt, but the job superintendent told workers “they take too much time to use,” Mr. Hoyle said, according to records.
Mr. Hoyle sued DTJ and Cavanaugh in the Summit County, Ohio Court of Common Pleas under the intentional tort exception to workers compensation exclusive remedy, records show.
Cincinnati Insurance Co., which insured DTJ and Cavanaugh under a commercial general liability policy, filed a complaint that it was not obligated to indemnify the employers should they be held liable, according to records. The commercial general liability policy excluded coverage for bodily injuries “employees sustained in the workplace or arising out of duties related to the insured's business,” among other exclusions, records show.
The trial court granted summary judgment in favor of Cincinnati Insurance, but Ohio's 9th District Court of Appeals reversed the decision in July 2013, according to records. Cincinnati Insurance petitioned the Ohio Supreme Court for review.
On Thursday, the Ohio Supreme Court ruled that Cincinnati Insurance would have no duty to indemnify DTJ and Cavanaugh, even if Mr. Hoyle establishes liability, because the commercial general liability policy excludes coverage for all employer intentional torts, according to the ruling.
Meanwhile, if Mr. Hoyle proves that DTJ and Cavanaugh “deliberately removed an equipment safety guard and that the removal directly caused his injuries, he will be entitled to a presumption that DTJ and Cavanaugh acted with the intent to harm him,” the ruling states.
DTJ and Cavanaugh argued that the commercial general liability policy is misleading if it doesn't provide indemnity coverage for employer intentional torts, records show.
However, according to the ruling, “even if it did not provide the coverage that DTJ and Cavanaugh intended to purchase, it provided other coverage, including negligence-only coverage when employers are sued in dual capacities and coverage in situations not involving the employment relationship.”
The Ohio Supreme Court therefore reversed the judgment of the 9th District Court of Appeals and reinstated summary judgment in favor of Cincinnati Insurance Co.
A dissenting justice wrote, “Now we have insurance agents selling worthless pieces of paper that will never pay a claim to assuage the fears of managers as they, in the name of increased production and reduced labor costs, remove saw guards, disable air filtration systems, and store time-consuming safety equipment in their offices.”
He added that “the genuine issue of material fact here is whether or not the job superintendent kept the bolts necessary to secure the ladder jacks to the ladders in his office because they took too much time to use. … The courthouse doors should not be closed to a person who suffered an intentional injury merely because they were at work.”