Employers Liability Exclusion – How Does It Apply?

Q

To capsulize the facts, a seven months' pregnant woman was struck by a patient while working in a nursing home. The fetus, a viable plaintiff, was injured. The carrier cites the employers liability exclusion on the CGL form to exclude injury to the child, saying that the injury arose out of and in the course of the mother's employment by the insured. We maintain that the injury was incidental to her employment and that the intent of the exclusion is to exclude from liability coverage collateral losses, such as loss of care and services and loss of consortium, not direct injuries to the spouse or child of the employee.

Your assistance in bolstering our assertion would be appreciated.

Ohio Subscriber

A

Our first impression upon reading the information about the injury and the exclusion was that the exclusion would apply. However, after reading the wording of the exclusion several times, we support your interpretation. The fetus was directly injured and such injury did not arise out of or as a consequence of the employment of the mother. The exclusion applies to bodily injury to the spouse, child, etc., of the employee as a consequence of bodily injury to the employee. In this case, the child was directly injured, not consequentially. The line is admittedly fine and we can see the insurer taking the position it does, but such reasonable ambiguity only helps the insured support its position. If the insured is liable for this injury, then the CGL form should apply; at the very least, the insurer owes the insured a defense against a lawsuit.

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