Claim background – Pennsylvania Workers Compensation and Employers Liability Policy. There are two entities listed on the policy; both are LLC's, one serving as the manager of the other.

An employee of one LLC is injured and workers compensation benefits are paid. The employee then hires an attorney and files a complaint against the machine manufacturer (not our insured), and initially against the employer, one of the LLCs listed on the policy. An employer's liability claim is submitted to the WC carrier, and initial defense was provided under the first complaint; employer is named but no allegations were made against them. The second amended complaint filed, employer (LLC on the policy), is removed from the complaint and the managing LLC (the second LLC listed on the policy) is named, as well as the owner.

The employer's liability carrier declined further defense because the employee does not work for the managing LLC; he works for the other LLC on the policy and there are no allegations  against the employer since they were removed from the complaint.