One of the security employees of the armored vehicle company was assaulted and killed in front of the insured supermarket. It was later found that the employer, the armored motor vehicle company, did not have an active workers compensation policy. The state workers compensation agency fined the armored motor vehicle company and allowed the family of the employee to collect benefits from the unpaid workers compensation policy. The state worker compensation agency described the insured supermarket as an “uninsured statutory employer” of the deceased employee.

The family of the security employee made a claim against the supermarket. Is this claim covered under the CGL policy of the supermarket (Form CG 00 01)? Do the workers comp and employer liability exclusions apply to this claim because of the definition of “uninsured statutory employer” by the state workers compensation agency?

Puerto Rico Subscriber

The uninsured statutory employer designation does cause a problem. It is unclear from the policy language whether that distinction makes the insured the employer for insurance purposes or not. Reading the workers compensation exclusion and the employer liability exclusion in the CGL form, there most likely is not any coverage for this claim. The workers compensation exclusion applies to “any obligation of the insured under a workers compensation law or any similar law.” And the employers liability exclusion applies whether the insured may be liable as an “employer or in any other capacity.” Since there was no workers compensation coverage in place at the time of the accident by either employer, the workers compensation exclusion would not apply, but if the insured is liable because the state has declared it to be a statutory employer, that would be interpreted by the policy as “any similar law” and/or “in any other capacity,” which would exclude coverage for this injury.