Legal Definitions - employee-liability exclusion

An employee-liability exclusion is a standard provision found in many commercial general liability (CGL) insurance policies. This clause specifically states that the insurance policy will not provide coverage for claims related to bodily injury to an employee of the insured business, or for certain types of property damage caused by an employee. The primary purpose of this exclusion is to prevent overlap with other specialized insurance policies, such as workers' compensation insurance (which is specifically designed to cover employee injuries) or commercial property insurance (which covers damage to the business's own assets).

• Example 1: Workplace Injury to an Employee

  A chef working at a restaurant accidentally cuts their hand severely while preparing food. The chef requires stitches and misses several days of work. They file a claim against the restaurant for their medical expenses and lost wages.

  How it illustrates the term: The restaurant's general liability insurance policy would invoke the employee-liability exclusion. This means the general liability policy will not cover the chef's injury claim. Instead, this type of claim is typically covered by the restaurant's workers' compensation insurance, which is specifically mandated and designed to handle workplace injuries to employees.

• Example 2: Employee-on-Employee Injury

  During a busy shift at a manufacturing plant, one assembly line worker accidentally bumps into a colleague, causing the colleague to fall and sprain an ankle. The injured worker sues the manufacturing company, alleging that the company failed to maintain a safe working environment.

  How it illustrates the term: The manufacturing company's general liability policy would likely apply the employee-liability exclusion. Even though the company is being sued, the injury occurred between two employees in the course of their employment. Such claims are typically addressed by workers' compensation insurance for the injured employee, and the general liability policy is excluded from covering this specific type of claim.

• Example 3: Employee Damaging Employer's Property

  A janitorial staff member, while operating a floor buffer, accidentally crashes into a display case in the lobby of the office building they clean, causing the case to shatter. The building owner seeks to claim the repair costs from their general liability insurer.

  How it illustrates the term: The general liability policy would likely deny coverage based on the employee-liability exclusion. This exclusion often extends to property damage caused by an employee to the employer's *own* property. Damage to the office building's display case would typically be covered under the building owner's commercial property insurance policy, not their general liability policy.