Whose Employee is it Anyway?: Federal Court Finds No Coverage for Injured Subcontractor's Claim Based on Modified Employer's Liability Exclusion

Injured construction worker

Attorneys Mr. Vita and Ms. Kane analyze Nagog Real Estate Consulting Corp. v. Nautilus Insurance Co.

September 28, 2020
Jeffrey J. Vita & Kerianne E. Kane - Saxe Doernberger & Vita

In Nagog Real Estate Consulting Corp. v. Nautilus Insurance Co.,1 the United States District Court for the District of Massachusetts held that an insurer had no duty to defend its insureds against claims brought by an injured subcontractor, based on an overbroad employer’s liability exclusion in the policy.

Nautilus Insurance Company issued a commercial general liability policy to developer Nagog Homes LLC and its related construction company, Nagog Real Estate. The policy was endorsed with an Employer’s Liability Exclusion (the L205 Endorsement) that expanded the scope of the standard exclusion in the coverage form to include bodily injury claims of employees of “any” insured and their contractors or subcontractors, as opposed to simply the employees of the named insured.

Nagog Homes was the developer, and Nagog Real Estate was the general contractor for a residential construction project. An employee of the framing subcontractor hired by Nagog Real Estate was injured while working on the project and sued both Nagog entities for his injuries. Nautilus, relying on the modified employer’s liability exclusion, denied coverage for the lawsuit based on allegations that the Nagog entities hired the framing subcontractor to perform work, which effectively made the plaintiff an employee of one or both of the Nagog entities.

Reprinted courtesy of Jeffrey J. Vita , Saxe Doernberger & Vita and Kerianne E. Kane, Saxe Doernberger & Vita
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Kane may be contacted at kek@sdvlaw.com



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