- Kentucky Appellate Court Finds Employer Liability Exclusion Inapplicable to Claims against Additional Insured
- February 10, 2014 | Author: George B. Hall
- Law Firm: Phelps Dunbar LLP - New Orleans Office
The Court of Appeals of Kentucky has held that a severability of interests clause precluded application of an employer liability exclusion to claims asserted against an additional insured who did not employ the injured party. Horn v. Sesco, 2013 WL 6571797 (Ky. App. Dec. 13, 2013) (unpublished opinion).
A worker was injured after falling out of a truck owned by his employer but driven by a permissive user. The worker sued the driver, who sought coverage under an auto liability policy issued to the employer/truck owner. The insurer intervened seeking a declaration of no coverage. The trial court ruled that, as a permissive user of the auto, the driver was an "insured," but held that the policy excluded coverage for bodily injury to an employee of the insured. Because the injured worker was an employee of the named insured, the trial court ruled that the exclusion applied. The driver appealed.
On appeal, the court agreed that the driver was an insured, but rejected the trial court's conclusion that the employer liability exclusion applied. Reading the exclusion in conjunction with the policy's severability of interest clause, the court concluded that the employer liability exclusion applied only if the party seeking coverage was the employer of the injured worker. Because the driver was not the employer of the injured worker, the exclusion was held to be inapplicable and the trial court's judgment was reversed.