The startup guys in the hit television series Silicon Valley might be surprised to learn that the California legislature has expanded the scope of mandatory Workers’ Comp coverage to include their corporate officers, directors and working partners. The new law, effective January 1, 2017, sweeps in a broad range of individuals, unless they file a written opt-out. These changes to the California Labor Code are creating confusion for some businesses regarding which employees must now be included on workers’ comp insurance coverage. The consequences of noncompliance can be severe, and businesses would be well-advised to ensure that they have secured the necessary additional coverage or obtained the necessary opt-outs from affected officers, directors, and working partners.
We put lights on the front of trains so we can see them approaching in a tunnel. And we buy insurance for the accidents that occur despite such precautions. General contractors try to manage their project risks by taking precautions to avoid accidents, but they also require subcontractors to name them as “additional insureds” on their general liability or project-specific insurance should an accident happen. Suppose you’ve done that. An accident follows: Your subcontractor injures a person on the project site as a result of your own workers’ failure to warn. You’re covered, right? Better slow down.
Imagine you are a prime contractor to a Department of the United States of America supplying logistical support for the war on terrorism in Afghanistan. As the prime, you are kicking on all cylinders, including purchasing comprehensive Employer’s Liability, Workers’ Compensation and Defense Base Act (DBA) insurance to cover your own employees against a worker injury claim abroad.
Then the phone rings.
A 30-year-old American worker hired by your subcontractor working on base encountered a swarm of bees while painting; he fell and was crippled. The sub isn’t paying his medical expenses and is apparently nowhere to be found. The injured employee’s bulldog lawyer is on the line threatening to sue your company directly for his client’s devastating injuries.
How can this be?
DBA coverage is workers’ compensation insurance that employers may turn to in the event that an employee is injured while working on a contract financed by the U.S. Government and performed outside the United States. Section 5(a) of the Act provides that “a contractor shall be deemed the employer of a subcontractor’s employees if the subcontractor fails to secure the payment of compensation.”
Barely removed from the Super Bowl, football fans have begun their long hibernation in anticipation of next season. But the Patriots’ incredible comeback reminds me that it coincided with the tenth anniversary of one of the great NFL coach rants, courtesy of the late Dennis Green of the Arizona Cardinals. Coach Green was interviewed after his team blew a 20-0 halftime lead to my beloved Chicago Bears. Using some other choice words, Green said about the comeback kids: “the Bears are who we thought they were!”
So what does this have to do with insurance? Well, unlike Coach Green, not all policyholders can say that their insurance policies are exactly what they thought they were. A recent Fifth Circuit case, Richard v. Dolphin Drilling Ltd., is such a case. There, the policy exclusions were so broadly construed that 99 percent of the insured’s operations were excluded from coverage.
The era of the self-driving car has arrived, with the shiny promise of fewer auto collisions—and the inevitable potholes of a transformative technology. Despite the significant concerns raised by a recent accident involving a driver’s reliance on a partially autonomous automatic braking and steering system on the Tesla Model S—one of 70,000 such vehicles now on the roads—the auto industry is roaring ahead with autonomous vehicles (AVs). Google is testing its driverless cars extensively on U.S. roads; General Motors has teamed up with car-sharing company Lyft to develop a driverless taxi service; and most major automakers will be releasing fully or partially autonomous vehicles in the next five years.
Colleagues Matthew D. Stockwell and Amanda Senske recently published an article in the June 2016 edition of Claims magazine, a PropertyCasualty360 publication, titled “Is That Product Liability Claim Covered?” In the article, they discuss Commercial General Liability insurance policies and whether or not these policies cover claims of bodily injury and property damage.
In Texas and other states, the mineral owner can freely use the surface estate to the extent reasonably necessary for the exploration, development and production of oil and gas. That includes activities such as building roads, drilling wells and transporting equipment and personnel. But frustrated property owners are increasingly bringing nuisance claims based on bright lights, loud noises, traffic, dust, odors, wastewater and other effects of these activities. A question facing the oil and gas industry is whether the costs of such nuisance claims are covered by insurance.