TMWB continues leadership in insurance coverage litigation

In a decision rendered March 5, 2008, the Appellate Division agreed with the Firm that a CGL policy exclusion which seemingly denied coverage for any subcontractor’s employee sustaining injury on a construction site with the insured – whether or not the insured had retained that subcontractor – was invalid. In Pyramid Construction, LLC v. Essex Insurance Company, Docket No.: A-4290-06T3, the court found that the following language was inherently ambiguous and nullified the protections of the policy:

[T]here is no coverage under this policy for ‘bodily injury’ or ‘property damage’ sustained by any contractor, self-employed contractor, and/or subcontractor, or any employee, leased worker, temporary worker or volunteer help of same.

This particular language had never been passed upon by a New Jersey court. The court’s decision was based primarily on the fact that immediately above the quoted language, was a requirement that the insured’s subcontractors meet certain insurance requirements, or coverage would not apply. The obvious question then was why require subcontractors to carry certain insurance, when they were not covered in the first place? Under the facts of the particular case, the insured was itself a subcontractor on a construction site where a worker was killed. The worker was not an employee of any of the insured’s subcontractors, but the carrier denied coverage anyway, exposing the insured to a potential multi-million dollar verdict. With this ruling by the Appellate Division, TMWB, lead by partner Joe Cobuzio, ensured a defense and indemnification for the insured.

TMWB regularly handles declaratory judgment actions on behalf of both insurers and insureds in the State and Federal courts of New Jersey.

Greg Lois is the managing partner of LOIS LLC and dedicates his practice to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 & 2017 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@loisllc.com