What Do You Think: Was Volunteer Status Enough to Avoid Insurance Exclusion?

Frank Ferreri

How much evidence does it take to convince a court that volunteer who shows up for work a couple of times isn’t an employee for purposes of an insurance contract?

A Pennsylvania court recently tackled that issue.

A construction company held an insurance policy that had exclusions for workers’ compensation benefits and liability for employees’ bodily injuries in the job.

A worker on a construction project volunteered for the company and experienced an injury on the job. Allegedly, the worker was allegedly “just helping out” by keeping cars safe when they came by the project and picking up materials thrown off the roof. The worker “helped out” two times on the project and had no further work with the company.

A dispute between the company and its insurer developed as to whether the worker was an employee or an independent contractor. At trial, the court determined that the worker was an employee, so the policy at issue excluded coverage.

Under the policy, an “employee” included a “leased worker” but not a “temporary worker.”

The policy defined a leased worker as “a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business.”

It defined a temporary worker as “a person who is furnished to you to substitute for a permanent ‘employee’ on leave or to meet seasonal or short-term workload conditions.”

The company appealed to the next level of court, arguing that the exclusion language at issue was ambiguous and thus should be found not to exclude coverage for the worker’s injury.

Under previous Pennsylvania cases, courts have interpreted insurance policies to favor the insured “to further the contract’s prime purpose of indemnification and against the insurer.”

Was the insurance company responsible for covering the worker’s injury?

  1. Yes. The exclusion did not apply because the worker was a volunteer and the language was ambiguous about coverage.
  2. No. Without more information from the company, a court couldn’t say that an employer-employee relationship did not exist.

If you selected B, you agreed with the court in Nationwide Mutual Fire Insurance Company v. Benjamin, No. 190 MDA 2020 (Pa. Super. Ct. 02/22/21, unpublished), which affirmed the lower court’s ruling and determined that the exclusion applied in this case.

The court faulted the company for not producing enough evidence for why the worker shouldn’t count as an “employee” for purposes of the insurance contract.

“This court is not in a position to act as [the company’s] counsel and argue why these definitions are purportedly ambiguous, let alone identify a particular set of facts,” the court wrote.

The court also explained that the company’s arguments didn’t detail why the worker should be considered an independent contractor under Pennsylvania workers’ compensation law, noting that the company didn’t “challenge the trial court’s … reasoning and explain how the trial court erred.”

As a result, the court determined that the exclusion applied.

This feature does not provide legal advice

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