An Employee is an Employee Even If the Employer Does Not Deduct Taxes

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Shelter Mutual sued seeking a declaratory judgment that neither its insureds were not entitled to indemnity and defense for claims pending against them in a wrongful death action. The district court granted Shelter’s motion for summary judgment, finding the subject policy’s “Employee Exclusion” provision precluded coverage. In Shelter Mutual Insurance Company v. Double J Timber Company, Incorporated; Dorothy Johnson; Christopher Johnson; Summer Johnson; Julie Pace, individually and as wrongful death beneficiaries of Jerry Lee Johnson, deceased, No. 19-60421, USCA 5TH 2/4/21) The Fifth Circuit was asked to decide applicability of the exclusion and the employment status of the decedent and the operator.

ZALMA OPINION

Commercial General Liability insurers usually exclude injuries to employees because the employer and employee are protected by Workers’ Compensation laws.  The employee exclusion was clear and unambiguous and therefore the CGL insurer, Shelter, owed neither a defense nor indemnity to Double J nor to the brother of the decedent.