On the other hand, the CGL carrier is denying the claim under its medical payments coverage. The CGL carrier's position is that this woman is an employee, and medical payments for employees are excluded.

Is there coverage under either of these policies?

Arkansas Subscriber

A

This question is difficult to answer definitively, but here are some thoughts.

Medical payments under the CGL policy are appropriately denied. This is because medical payments are excluded for “a person hired to do work for or on behalf of any insured . . .”

This exclusion does not require that the person actually be engaged in work on behalf of the insured at the time of injury, only that she be “hired” to do work.

Workers Compensation

This area is trickier. As you know, state law governs workers compensation. In general in Arkansas , workers compensation is triggered when an injury arises during the performance of employment services. Employment services is not defined.

Therefore, the question becomes whether the injured employee's diversion to hand a check to a friend falls within the performance of employment services. It is fairly safe to say that, had the employee been injured while walking to the business meeting—absent the side trip to hand the check to a friend—the injury would fall within the performance of employment services. The issue of handing the check to a friend makes it more difficult.

In Clardy v. Medi-Homes LTC Services LLC, 2001 Ark. App. LEXIS 668 (2001), the Arkansas appeals court reviewed a workers compensation commission's reversal of the award of benefits. In this case, Clardy was emptying waste buckets but had stepped across a driveway to talk to a coworker when injured. The administrative law judge awarded benefits, but the workers compensation commission reversed.

The appeals court said that “…unless her employer was a 'Simon Legree', there is no reason for the Commission to speculate that such a minor diversion would have been forbidden to the nursing home's [Medi-Homes] employees.” However, the court went on to say that Clardy (the injured employee) would have to show that the diversion in some way served the employer's interest or was necessary to the performance of her duties. The Court stated “…the burden of proving entitlement to benefits ultimately rested upon her [Clardy's] shoulders.” The court affirmed the reversal of benefits because Clardy did not provide such evidence.

In Matlock v. Arkansas Blue Cross Blue Shield, 49 S.W.3d 126 (Ark. Ct. App. 2001), the appeals court stated that whether a worker performs employment services and suffers an accident within the course of employment is a factual question that should be resolved on the details of each case. “…the critical inquiry is whether the activity advances the employer's interest.”

Factors that the Matlock court said should be considered are whether the accident occurred at a time, place, or under circumstances that advanced the employer's interest; whether the accident occurred when the employee was engaged in an activity required by the employer; whether the accident occurred in an activity that was known by or permitted by the employer as an interruption from work activities; and whether the employer expected the worker to return from permitted nonwork activity in order to advance some employment objective.

Therefore, it appears that triggering workers compensation benefits would be determined by whether the injured employee could show that her taking the detour to give her check to a friend advanced some objective of her employer. The fact that she was using her lunch hour to attend a business meeting may relate to this argument.

This seems to be the type of case that the workers compensation judicial system might have to ultimately decide.