Derivative Injury

In this instance, the minor herself was exposed to carbon monoxide and was injured, an injury separate and distinct from the mother's injuries. Therefore, workers' compensation was not an exclusive remedy for the child, and she was allowed to sue the employer as a third party injured through the employer's negligence.

This case and others like it are based on the derivative injury idea. Basically, this theory holds that if the fetus suffered an injury apart from the mother, that is, the injury to the fetus did not derive from his mother's injury, the workers' compensation exclusivity rule would not bar a child's action against the mother's employer for the child's in utero injuries.

On the other hand, the United States District Court, District of Columbia, ruled that the plain terms of the workers' compensation act in the D.C. area expressly limits all liability of an employer to an employee and to that employee's dependents to the workers' compensation system.

In Lockhart v. Coastal International Security, Inc., 2012 WL 5873681, an employee and her child brought an action against the employer asserting claims for negligence, negligent supervision, and the infliction of emotional distress when the supervisor denied the mother's extra break when she was not feeling well due to her pregnancy.

The court reviewed the facts of the case and the wording of the workers' comp statute and said the law's provision could be read to limit the employer's liability to third parties for damages arising from a work-related injury to the employee to recovery under the workers compensation system.

Third-Party Liability

So, if the employer is subject to either a third-party general liability lawsuit or a workers' compensation claim arising from injuries to a fetus, is there insurance coverage for the exposure?

The workers' compensation policy provides coverage for benefits required by the state's workers' compensation laws and applies to injuries suffered by employees in the course of employment. If the decision noted in the Snyder is the rule, then the child is not an employee and derives his claim against the employer, not as an employee, but as a separate and distinct party. As for the employers liability insurance part of the workers' compensation policy, this applies to damages the employer must pay because of injury to an employee. The coverage does apply to consequential injury to a child, but it is based on injury to the employee parent, and the derivative injury rulings stress that the claims of a newborn are due to the baby's own injuries and do not arise from injury to the parent employee.

If the Lockhart ruling is followed, then the workers' compensation policy will provide the benefits required by the specific statute.

This brings up the question of coverage under the commercial general liability (CGL) policy. The CGL form does offer an employer hope for some insurance protection against the claims of newborns. Under the Lockhart ruling, the CGL form would not come into play due to that policy's workers' compensation exclusion. The CGL form does have an employer's liability exclusion; however, this applies to bodily injury to an employee and not to injuries suffered directly by a fetus.

Under the Snyder ruling, the fetus, having suffered an injury independent from the mother's injuries, is a third-party plaintiff and can seek damages from the employer. Unless there is an exclusion that would prevent coverage, the CGL form will be applicable to that third-party claim.

An employer should be aware of the exposure he faces if a pregnant employee is injured on the job. The workers' compensation policy and the CGL form are there to offer some insurance protection against claims based on injuries to an unborn child, but of course, the best protection is good risk management.

David D. Thamann, JD, CPCU, ARM, is managing editor for FC&S Online.