Employment Related Exclusions under CGL Coverage Form
January 15, 2013
The insurer brought a lawsuit seeking a declaration that it had no obligation to defend or to indemnify the insured from an underlying wrongful death action. This case is Catlin Specialty Insurance Company v. Cohen, 2012 WL 3271806.
The deceased (Cohen) visited the insured's premises because of a contract between the insured and Alko Systems for the installation of security cameras; the deceased conducted his security camera business through Alko Systems, his corporation. Cohen had submitted a written proposal to install security cameras at a Marco Island project. After the proposal was accepted and Cohen was hired to install the security system, Cohen entered the property and ascended to the roof to measure for the installation of the security cameras. Cohen fell to his death while on the roof.
The insured's general liability policy from Catlin Specialty Insurance excludes from coverage an injury to an independent contractor. The insured claims that because the deceased had failed to provide the agreed proof of insurance and, therefore, allegedly had failed to satisfy a condition precedent to the contract and because the deceased otherwise lacked permission to ascend to the roof, the deceased was an unauthorized trespasser and not yet an independent contractor. The insurer countered that Cohen was an independent contractor performing work for the insured property owner at the time of his death and the exclusion in the policy applied. So, the district court said that the issue was whether the decedent was on the property as an independent contractor and thus triggered the independent contractor exclusion.
After reviewing the facts of the situation, the court found that the owner of the property planned to exercise little, if any, control over the details of the work; the proposal put forth by Cohen and accepted by the property owner contemplated work independent of supervision by the property owner. Moreover, Cohen was to provide the instrumentalities and tools for the work and was employed only for the specified job and for the necessary time. Cohen was paid for that job in a subdivided lump sum and not by the hour or any other unit of time. In other words, he was not paid hourly for his supervised labor in the manner of an employee, but was paid in a sequence of lump sums for the unsupervised but satisfactorily completed installation of security cameras in the manner of an independent contractor. These facts matched the Restatement of Agency, §220 considerations in determining whether one acted as an independent contractor.
The court ruled that, on the day of his death, Cohen had a valid contract with the property owner that required him to purchase and install security cameras. Cohen had submitted and the insured had accepted a written proposal and the insured had issued a check to cover the purchase of the cameras. No breach of the contract had occurred. In furtherance of the contract, Cohen ascended the roof, fell, and died. At the moment of his death, Cohen was indisputably on the roof under contract with the insured. Cohen was undoubtedly an independent contractor and, as such, an injury to him is excluded from coverage under the wording of Catlin's general liability policy.
The motion of the insurer was granted.
Editor's Note: The United States District Court reviewed and adopted the Restatement Second principles and measured them against the facts of this incident to determine the status of the deceased. This procedure established that the deceased was in fact an independent contractor, and the policy clearly excluded coverage for bodily injury to an independent contractor arising out of and in the course of employment of the insured.
When the facts of an incident clearly match the wording of an exclusion, that exclusion applies.