Plaintiff employer appealed judgment from the San Mateo County Superior Court (California) for defendant State Compensation Insurance Fund (State Fund) entered growing out of State Fund’s refusal to defend or indemnify plaintiff under workers’ compensation and employer’s liability insurance policy, in third party action brought against plaintiff by former employees.
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Overview
Plaintiff employer was sued by three former employees. The defendant state compensation fund refused to defend or indemnify him under a workers’ compensation and employer’s liability insurance policy. Plaintiff claimed that bodily injury (or disease) as to one employee was potentially within coverage and thus required a defense of the entire action. Plaintiff maintained that a covered claim was potentially presented. The employer’s liability coverage provided coverage to employers for those injuries to their employees not covered by workers’ compensation. The court found all evidence showed that any asserted “bodily injury” or “disease” claims from the employee’s action concerned employees who were employed by plaintiff and subject to the remedy of the workers’ compensation law. Accordingly, as a matter of law, coverage was precluded by the workers’ compensation exclusion.
Outcome
Judgment affirmed. Given the policy language, context, and nature and kinds of risks covered by the policy an employee’s action against plaintiff employer raised no claims potentially within employer’s liability coverage. The workers’ compensation exclusion foreclosed any potential for coverage.