Two Insurers Protected the Insured and Resolved the Coverage Dispute Later

Barry Zalma | Zalma on Insurance

When two insurers dispute which is obligated to defend and indemnify the insured in a bodily injury suit, they both paid half of the settlement and agreed to resolve their differences later in a declaratory relief action – an action of absolute good faith.

In Old Republic Insurance Company v. The Young Men’s Christian Association a/k/a YMCA Of Metropolitan Chicago and Riverport Insurance Company, 2022 IL App (1st) 210294-U, No. 1-21-0294, Court of Appeals of Illinois, First District, Fifth Division (May 27, 2022) the Court of Appeals resolved the dispute after the trial court ruled in favor of Old Republic.


Old Republic Insurance Company (Old Republic), sued for declaratory judgment against the Young Men’s Christian Association of Metropolitan Chicago (YMCA) and Riverport Insurance Company (Riverport). The circuit court granted summary judgment in favor of Old Republic. YMCA and Riverport appealed.

In September 2012, YMCA hired Air Comfort Corporation (Air Comfort) as the contractor to perform routine HVAC maintenance on YMCA’s Chicagoland facilities. On September 17, 2012, YMCA and Air Comfort entered into a “Master Agreement Between Owner and Contractor” (Master Agreement). The Master Agreement was drafted by YMCA’s counsel. The Master Agreement provided: Section 6 of the Master Agreement required Air Comfort to obtain commercial liability insurance and to name YMCA as an additional insured on the policy.

On May 13, 2013, an Air Comfort employee, Joseph Dale, sustained injuries while working on the upgrade project at the Indian Boundary facility. Mr. Dale filed a negligence complaint against YMCA, claiming that YMCA failed to inspect and safely maintain the vent pit and grating at its Indian Boundary facility which resulted in his injuries.

YMCA tendered defense and indemnification of Mr. Dale’s lawsuit to Air Comfort’s insurance carrier, Old Republic. Old Republic denied coverage.

The declaratory relief suit sought a declaration that Old Republic owes “no duty to defend, indemnify or otherwise provide additional insured coverage to YMCA” under Old Republic’s insurance policy with Air Comfort for losses incurred in connection with Mr. Dale’s lawsuit. Old Republic’s policy required additional insured persons or organizations to be included in a written contract or agreement.

The complaint alleged: “There is no written contract that required Air Comfort to name YMCA as an additional insured on its *** Policy with respect to work performed by Air Comfort at the Indian Boundary YMCA pursuant to any such contract.”

While the declaratory judgment action was pending, Mr. Dale settled his lawsuit against YMCA for $700,000. In turn, YMCA and Riverport entered into a separate agreement with Old Republic, entitled “Settlement Agreement and Release.” The Settlement Agreement and Release provided that YMCA and Riverport would pay half of Mr. Dale’s settlement amount ($350,000) and Old Republic would pay the other half ($350,000).

The parties agreed that the resolution of Mr. Dale’s lawsuit “does not in any way resolve the matters to be litigated” in the declaratory judgment action, which the Settlement Agreement and Release referred to as “the Coverage Suit.” Pursuant to the Settlement Agreement and Release, the parties agreed that:

“[I]f in the Coverage Suit a judicial determination is made that Old Republic owes additional insured coverage under the Old Republic Policy to YMCA for the [Mr.] Dale Lawsuit, then Old Republic will pay YMCA and [Riverport] $350,000 plus the attorneys’ fees and costs incurred by the YMCA and [Riverport] in defending the [Mr.] Dale Lawsuit.” Similarly, the Settlement Agreement and Release further provided that YMCA and [Riverport] will pay Old Republic $350,000 plus $197,000 for a total payment of $547,000. This would reimburse Old Republic for the $350,000 paid to [Mr.] Dale plus the waived workers compensation lien $197,000.”

The trial court granted Old Republic’s motion for summary judgment and denied YMCA and Riverport’s motion. In so ruling, the trial court stated: “This Court finds there’s no genuine issue of material fact [t]hat there is no writing of which the YMCA becomes an additional insured for that specific location.”


Summary judgment was granted by the trial court in this case, on the basis that the Indian Boundary Statement of Work did not require Air Comfort to add YMCA as an additional insured on its insurance policy, and so Old Republic does not have a duty to provide coverage to YMCA for Mr. Dale’s lawsuit.

Significantly, YMCA and Riverport do not contend that the Indian Boundary Statement of Work is ambiguous. The appellate court concluded that  Indian Boundary Statement of Work is, an unambiguous contract, as the language is clear, and the general meaning is easy to ascertain. The Indian Boundary Statement of Work does not provide, anywhere or in any way, that the parties intended for Air Comfort to add YMCA as an additional insured on its insurance policy with Old Republic. In fact, the word “insurance” is not even mentioned in the Indian Boundary Statement of Work.

The appellate court concluded that the Indian Boundary Statement of Work does reference a contract entitled, “MASTER SERVICES AGREEMENT DATED FEBRUARY 11, 2013,” and “Standard From [sic] of Agreement Between Owner and Contractor, dated February 11, 2013.” But, as the trial court pointed out, no such contract document exists. Further, YMCA and Riverport do not claim that they can produce that document. And they do not offer any other explanation regarding the discrepancies in the description of the referenced, non-existent, contract document.

Rather, YMCA and Riverport asked the court to look to the Master Agreement and the Irving Park Agreement to demonstrate the parties’ intent for the Indian Boundary Statement of Work. However, if a contract is unambiguous on its face, extrinsic evidence may not be used to interpret it.

Mr. Dale’s lawsuit arose out of the work contracted in the Indian Boundary Statement of Work between Air Comfort and YMCA for the upgrade project at the Indian Boundary facility. The Indian Boundary Statement of Work is a clear and unambiguous contract that does not reference any other existing contract document; there is no reason for the court to look to another contract.

Accordingly, the court of appeal concluded that there is no genuine issue of material fact that the Indian Boundary Statement of Work did not require Air Comfort to add YMCA as an additional insured on its insurance policy, and so, Old Republic is not required to provide insurance coverage to YMCA for Mr. Dale’s lawsuit. The trial court therefore properly granted summary judgment in favor of Old Republic in the declaratory judgment action


The two insurers did the right thing for their insured, the YMCA. The lawyer for the YMCA, who drew the various contracts between the Y and Air Comfort, erred in drafting a contract incorporating a non-existent contract and failed – for the project where Mr. Dale was injured – to require that Air Comfort make the Y an additional insured.  The two insurers, although, they disagreed, acted in absolute good faith to their insured and resolved their differences without exposing the insured to damages.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

A Riveting (or at Least Insightful) Explanation of the Privette Doctrine

Garret Murai | California Construction Law Blog

“The wheels of justice turn slowly, but grind exceedingly fine” – Plutarch

And grind they do . . . slowly. For long time readers of the California Construction Law Blog you may recall a case we reported on over three years ago in 2018 – Sandoval v. Qualcomm Incorporated – a rather sad case about a severely injured employee of an electrical subcontractor with an even more surprisingly ending.

In Sandoval, the 4th District Court of Appeals affirmed a $7 million judgment against project owner Qualcomm Incorporated in which a jury found that Qualcomm was liable under the Privette doctrine for injuries sustained by the employee who was severely burned over one third of his body by an “arc flash” from a live circuit breaker. The Court of Appeals, in a surprising decision, upheld the verdict holding that Qualcomm was liable even through: (1) Qualcomm had informed the electrical subcontractor that certain live circuit breakers were energized; (2) Qualcomm had not authorized the lower-tiered contractor to remove a panel that resulted in the arc flash; and (3) employees of Qualcomm were not in the room when the accident happened.

Fast forward three years to September 2021. Qualcomm attorneys petition the California Supreme Court for review of the Court of Appeal’s decision. And the Supreme Court granted review.

The Supreme Court Decision

In Sandoval v. Qualcomm Incorporated, Case No. S252796 (September 9, 2021), the California Supreme Court, describing the Privette doctrine and two of its exceptions – the “concealed hazard” exception and the “retained control” exception – explained:

Strong public policy considerations readily acknowledged in our past decisions generally support a straightforward presumption about the responsibilities of hirers and contractors for worker injuries in situations like this: A person or entity hiring an independent contractor (a “hirer”) ordinarily delegates to that independent contractor all responsibility for the safety of the contractor’s workers. This presumption is rooted in hirers’ reasons for employing contractors in the first place, and society’s need for clear rules about who’s responsible for avoiding harms to workers when contractors are hired. We have therefore generally avoided subjecting hirers to tort liability for those workers’ injuries. But that presumption gives way to two recognized exceptions: where the hirer either withholds critical information regarding a concealed hazard (Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 664 (Kinsman)); or retains control over the contractor’s work and actually exercises that control in a way that affirmatively contributes to the worker’s injury (Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202 (Hooker)).

Describing the “concealed hazard” exception under Kinsman, the Supreme Court explained:

In Kinsman we recognized that a landowner-hirer cannot effectively delegate its duties respecting a concealed hazard without disclosing that hazard to the contractor. In this context, a “concealed” hazard means something specific: a hazard that the hirer either knows or reasonably should know exists, and that the contractor does not know exists and could not reasonably discover without the hirer’s disclosure. We draw no distinction between a hazard whose very existence is concealed and a hazard which is in some way apparent but whose dangerousness is concealed. The sufficiency of the hirer’s disclosure is “measured by a negligence standard,” that is, a standard of reasonable care. If the hirer does not sufficiently disclose the concealed hazard, the hirer retains its tort duties owed to the contract workers respecting that hazard. A contrary conclusion would cut against the rationale justifying Privette‘s presumption of delegation. A contractor is not best situated to perform work safely when the contractor lacks critical information about relevant hazards. Nor is there any unfairness in holding the hirer liable where only the hirer possessed that critical knowledge.

Describing the “retained control” exception under Hooker, the Supreme Court explained:

In Hooker, we recognized that hirers do not always fully delegate control to their contractors. We concluded that in some such “retained control” situations, notwithstanding Privette‘s presumption to the contrary, the hirer must owe a duty of care to the contract workers.

The plaintiff in such cases must establish not only that the hirer retained control over the contracted work, but also that the hirer actually exercised that retained control in a manner that affirmatively contributed to the contract worker’s injury. Because Hooker‘s application has produced significant confusion, we dwell at some length here on the meaning of Hooker‘s three key concepts: retained control, actual exercise, and affirmative contribution.

A hirer “retains control” where it retains a sufficient degree of authority over the manner of performance of the work entrusted to the contractor. This concept simply incorporates the Restatements’ theory of retained control: Against a backdrop of no hirer duty respecting the manner of performance of work entrusted to a contractor, the Restatements provide that a hirer who retains control over any part of that work owes others a duty of reasonable care respecting the hirer’s exercise of that retained control. So “retained control” refers specifically to a hirer’s authority over work entrusted to the contractor, i.e., work the contractor has agreed to perform. For simplicity we will often call this the “contracted work” — irrespective of whether it’s set out in a written contract or arises from an informal agreement. A hirer’s authority over noncontract work — although potentially giving rise to other tort duties — thus does not give rise to a retained control duty unless it has the effect of creating authority over the contracted work. Furthermore, a hirer’s authority over the contracted work amounts to retained control only if the hirer’s exercise of that authority would sufficiently limit the contractor’s freedom to perform the contracted work in the contractor’s own manner. 


A hirer “actually exercise[s]” its retained control over the contracted work when it involves itself in the contracted work “such that the contractor is not entirely free to do the work in the contractor’s own manner.” In other words, the hirer must exert some influence over the manner in which the contracted work is performed. Unlike “retained control,” which is satisfied where the hirer retains merely the right to become so involved, “actual exercise” requires that the hirer in fact involve itself, such as through direction, participation, or induced reliance.

“Affirmative contribution” means that the hirer’s exercise of retained control contributes to the injury in a way that isn’t merely derivative of the contractor’s contribution to the injury. Where the contractor’s conduct is the immediate cause of injury, the affirmative contribution requirement can be satisfied only if the hirer in some respect induced — not just failed to prevent — the contractor’s injury-causing conduct. It is not enough for the hirer’s exercise of control to incidentally give the hirer the opportunity to prevent the contractor’s injury-causing conduct.

A hirer’s conduct also satisfies the affirmative contribution requirement where the hirer’s exercise of retained control contributes to the injury independently of the contractor’s contribution (if any) to the injury. 

The critical factor here is the relationship between the hirer’s conduct and the contractor’s conduct, not whether the hirer’s conduct, assessed in isolation, can be described as “affirmative conduct.” Importantly, neither “actual exercise” nor “affirmative contribution” requires that the hirer’s negligence (if any) consist of an affirmative act. The hirer’s negligence may take the form of any act, course of conduct, or failure to take a reasonable precaution that is within the scope of its duty under Hooker.

Applying each of these exceptions, the Supreme Court held that Qualcomm owed no tort duty to the injured worker, Sandoval, because Qualcomm neither failed to sufficiently disclose the hazard of a potential arc flash under Kinsman nor affirmatively contributed to Sandoval’s injuries under Hooker. The Supreme Court also held that the pattern jury instruction used in the case – CACI No. 1009B – does not adequately capture the elements of a Hooker claim.

With respect to the “concealed hazard” exception under Kinsman, the Supreme Court explained that Frank Sharghi, President of TransPower Testing, Inc., the general contractor who had hired the subcontractor employing Sandoval, had testified that that he was aware of which circuits were live and which were not. Thus, explained the Supreme Court, the condition of the live circuits “was not actually concealed.” Further, explained the Supreme Court,  the testimony of Qualcomm’s plant operator Mark Beckelman, was that he reminded Sharghi and his team that some circuits in the switchgear room would remain live. Thus, explained the Supreme Court, Qualcomm had in fact disclosed that there would be live circuits in the switchgear room. “Either way,” held the Supreme Court, “Qualcomm effectively delegated to TransPower any tort duties Qualcomm otherwise would have owed Sandoval respecting these live circuits under Kinsman.”

With respect to the “retained control” exception under Hooker, the Supreme Court explained that, while Qualcomm had control over the power-down process, by powering-down the circuits to be worked on but not powering down other circuits. this did not constitute “retained control” over the contracted work because the power-down process was not within the scope of work Qualcomm had entrusted to TransPower:

True: Qualcomm directed TransPower to observe the power-down process. And it asked TransPower to confirm that TransPower was satisfied with Qualcomm’s performance of the power-down process. Qualcomm nonetheless stopped short of offering — and TransPower never agreed — that TransPower take responsibility for actually performing the power-down process. Nor is it enough here that the power-down process was a necessary precondition for TransPower’s work, or that both the power-down process and TransPower’s work were essential components of a single larger job. Instead, Qualcomm’s performance of the power-down process implicates a retained control duty only to the extent that performance actually resulted in retained control over the work Qualcomm did entrust to TransPower: the inspection of the main cogen circuit.

Further, explained the Supreme Court, although Qualcomm’s performance of the power-down process arguably limited TransPower’s own freedom to power down “additional” circuits during its inspection, Qualcomm did not retain control over the inspection of the main cogen circuit merely by keeping certain other circuits live:

Qualcomm’s creation of this condition at the worksite imposed too little a degree of control over TransPower’s manner of performing the inspection. Even if Qualcomm could be said to have conveyed an expectation that TransPower perform its work in the presence of live circuits, TransPower was aware of and had ample freedom within the scope of its entrusted work to accommodate the presence of the live circuits effectively in its own manner, particularly since they were safely covered by bolted-on protective panels and not relevant to TransPower’s inspection. Qualcomm did not retain control over the inspection merely by declining to shut down these circuits or to give TransPower the authority to do so. Under the circumstances here, Qualcomm’s control over what was and what was not powered down did not constitute retained control over the contracted work.

Finally, explained the Supreme Court, even though Qualcomm may have had authority to require specific precautions during the inspection, such as by powering down the generator, Qualcomm did not “actually exercise” that authority:

Even assuming that Qualcomm retained control by retaining the authority to require or provide such precautions — e.g., supervision, a personal warning for Sandoval, arc flash protection suits, barricades, and/or additional warning signage — TransPower remained entirely free to implement (or not) any of these precautions in its own manner, issues over which Qualcomm exerted no influence. Although Sandoval argues that Qualcomm’s performance of the power-down process gave rise to a “duty” on Qualcomm’s part to take these precautions, he does not argue — nor is there any indication in the evidence — that Qualcomm’s performance of the power-down process induced TransPower’s failure to take any of these precautions itself. Likewise, that Qualcomm may have previously supervised TransPower’s work does not establish, in this case, that Qualcomm induced TransPower’s reliance on Qualcomm supervision. Sharghi’s uncontradicted testimony established that the reason TransPower did not request or wait for Qualcomm’s supervision was that Sharghi felt “in charge,” “knew what [he was] doing,” and didn’t “need” a monitor. That Qualcomm’s employees may have been trained to provide personal warnings to everyone in the room, or that Qualcomm’s managers and experts may have considered such warnings “critical,” does not establish that Qualcomm induced TransPower’s reliance on Qualcomm to provide them. Substantial evidence does not support the conclusion that Qualcomm actually exercised its retained control with regard to any of these precautions.


Sandoval provides important clarifications under Privette doctrine and, specifically, with respect to the “retained control” exception under Hooker. First, even if a hirer could make a worksite safer, as in the present case had Qualcomm powered down all of the circuits, if the scope of work does not involve work in the still dangerous areas, the hirer will not be deemed to have retained control over those dangerous areas. Second, even if there are dangerous areas of a worksite, so long as a contractor has adequate means of ensuring the safety of its workers, the hirer will again not be deemed to have retained control over those dangerous areas. And, finally, even if a hirer could require that its contractors implement certain worksite safety measures, a hirer will not be deemed to have retained control over the contractor’s means and methods so as to avoid injury to the contractor’s employees. 

Extra Credit Points: Can you guess what the illustration above is based on? If you guessed Plutarch, sorry. If you guessed the “Wheel of Pain” from 1982’s Conan the Barbarian, featuring our former Governor, you guessed right. We’re very high brow here at the California Construction Law Blog.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Court Finds No Coverage for Workplace “Prank” With Nail Gun

Craig Rokuson | Traub Lieberman

In the recent case of Metro. Prop. & Cas. Ins. Co. v. Burby, 2022 NY Slip Op 22070, ¶ 1 (Sup. Ct.) Justice Richard M. Platkin of the Supreme Court of Albany County, New York examined a homeowners insurance policy and determined that a duty to defend was triggered in a case seeking recovery for injuries sustained when the insured, Burby allegedly discharged a nail gun in the bathroom of a work facility at which both Burby and the underlying plaintiff worked. Burby pled guilty to assault in the third degree for recklessly causing physical injury. MetLife, Burby’s carrier, disclaimed coverage based on lack of an occurrence, the business activities exclusion and the intentional loss exclusion, which bars coverage for injuries expected or intended by the insured or injuries that are the result of the insured’s intentional and criminal acts or omissions. Justice Platkin initially reviewed the intentional loss exclusion and lack of an occurrence and found that, from a duty to defend perspective, neither provided a dispositive coverage defense. However, the court found that the broadly worded business activities exclusion, which was not the subject of MetLife’s motion and instead was the subject of a cross motion by Burby, applied to bar coverage. In doing so, the court searched the record and granted summary judgment on the issue, despite MetLife not moving for relief under the exclusion.

With respect to the expected or intended prong of the intentional loss exclusion, the court found that, even if Burby did intend to pull the trigger of the nail gun, it was not pled in the underlying complaint that the harm that resulted to the plaintiff was expected or intended. As such, the court concluded that MetLife did not prove that there was no possible factual or legal basis upon which it could be found that Burby did not reasonably expect or intend to cause injury to the plaintiff.

With respect to the intentional and criminal acts prong of the intentional loss exclusion, the court held that the exclusion is satisfied where the victim’s injuries were caused by an intentional act that constitutes a crime. Here, the court noted that Burby clearly engaged in a crime, but that the record did not establish that as a matter of law that the injuries were caused by an intentional act. In this regard, the court noted that, in the underlying complaint, plaintiff alleged that Burby was known to often to engage in horseplay and/or pranks with other employees, such that a reasonable possibility of accidental discharge existed.

With respect to whether the incident was an “occurrence,” defined to be an accident, the court also found that MetLife fell short. Although assault is not an occurrence, Justice Platkin noted that the underlying complaint alleged, in the alternative, causes of action for ordinary negligence, gross negligence and recklessness as the result of a “prank” gone wrong. Further, as Burby pled guilty of reckless—not intentional—assault, the plea was not determinative of whether Burby’s actions were an “occurrence.”

The court then turned to Burby’s cross motion seeking a declaration of coverage. After dismissing two non-dispositive exclusions, the court examined the business activities exclusion, noting that the exclusion broadly bars coverage for injuries arising out of or connected with Burby’s business activities. “Arising out of,” under New York law, is interpreted to mean that coverage does not exist when the injury would not have occurred “but for” the excluded activity. Here, Burby injured a fellow employee at their workplace, involving Burby’s misuse of a work tool. As the court noted, had Burby not been present at his workplace, he would not have access to the plaintiff and a nail gun. As such, the court held that Burby’s business activities provided both the occasion for the incident and the instrumentality of the injury. The court searched the record and granted summary judgment on the duty to defend to MetLife.

This case illustrates both the broad duty to defend under New York law, in that the court did not preclude coverage based on lack of an occurrence or on the intentional loss exclusion. It also illustrates the broad interpretation of “arising out of” when used in an exclusion.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

Can Your Employee File a Personal Injury Claim if They’re Injured at Work?

Louis Patino | Construction Executive

Construction accidents can happen to anyone. It’s common for employees to work at height, with machinery or alongside any number of potential hazards, so it’s no surprise that injury rates in construction are 71% higher compared to other industries.

Anything from a ladder manufacturing defect to an unguarded ledge or wet surface can increase the likelihood of a fall, but those aren’t the only dangers. If scaffolding collapses due to an excessive load or improper construction, it can prove fatal.

Then, there are struck-by hazards—one of the Occupational Safety and Health Administration’s (OSHA) “Fatal Four”—including falling, swinging and rolling objects; crane misuse; electrical faults; and issues with personal protective equipment. These are all hazards construction workers have to contend with daily.

Such dangers can also cause wide-ranging injuries, from broken bones that heal without complication to life-changing traumatic brain injuries or spinal injuries that have huge repercussions for construction workers.

In any case, a construction accident can cause a long, often painful, recovery, with workers needing significant time off work to recover.

But where do they stand when it comes to compensation? Can they file a personal injury claim or can they expect only a workers’ compensation payout to cover their lost income and medical expenses?


Most construction workers are aware they are entitled to workers’ compensation when they’re injured at work. In all states but Texas, workers’ compensation insurance is mandatory, which means that if your employee is injured at work—and they can prove it—they can claim workers’ compensation.

It’s important to note that there are exceptions depending on your location. For example, workers’ compensation insurance is not required in some states if you employ only a few individuals or have a smaller revenue. That said, workers’ comp exists to protect you from liability while also providing your employee with a financial buffer if they’re in an accident, so it’s well worth considering.

So what does the insurance cover? Workers’ compensation covers any medical expenses incurred to treat your employee’s injury and lost wages for time off work. They aren’t entitled to any additional compensation for pain and suffering or any loss of enjoyment a long-term injury might cause.

What many construction workers aren’t aware of, though, is that they may be able to file a personal injury claim.

The burden of proof for this type of claim is more complex, as they must show that a third party is liable for their injury.

To file a third-party personal injury claim, an employee or contractor must prove:

  • The third party owed them a duty of care;
  • The third party breached that duty of care; and
  • That breach of duty caused the injury.

A breach could be any negligent behavior, from failing to protect workers from exposure to hazardous substances or materials or providing them with defective personal protective equipment.

The benefit of an individual filing a personal injury claim is that they could also receive non-economic damages. These damages differ from economic damages like lost wages or medical expenses because they can’t be as easily quantified in monetary terms. Common non-economic damages include pain and suffering, emotional distress and loss of enjoyment. This can lead to a potentially hefty payout, especially for younger workers.


Your employee might have been injured during a construction accident and received a workers’ compensation payout but, sometimes, third parties are liable for the accident. In this case, they may also be able to file a personal injury claim.

Does this mean that you could face a hefty personal injury payout? Not necessarily.

If you have workers’ compensation, this will cover your employees’ lost wages and medical expenses. Filing a workers’ compensation claim is not an admission of liability or negligence, as these don’t come into play.

For example, if you employ a construction worker who has an incident while using faulty equipment, you can file a workers’ compensation claim with your insurer to cover their medical treatment and lost wages. Because you have this insurance, your employee cannot sue you. However, because the tool caused the injury and was defective, the employee may choose to sue the manufacturer.

If you don’t have insurance (for example, you’re in Texas and you either choose not to or you don’t meet the mandatory criteria) and your employee can prove you have breached a duty of care, they may choose to file a personal injury claim. If their claim is successful, you could face a large payout comprising not just their past and future monetary expenses but also an additional payout for any “pain and suffering” the injury has caused.


Claiming Workers’ Compensation

If you have workers’ compensation insurance and an employee has been in an incident at work, they should immediately seek medical treatment and then inform you of their injury—making it clear that it happened on the job. Employees have a strict time frame to do this, ranging from a few days to several months, depending on your state.

Then, you need to inform your insurer about the incident  and file the appropriate paperwork. The Workers’ Compensation Commission in your state will review the case and determine whether your employee is entitled to compensation and how much they should receive.

Filing a Third-Party Lawsuit

If your employee believes a third party was negligent or reckless and caused their injury, they might file a third-party lawsuit. Remember, they can only file a claim against you if you do not have workers’ compensation insurance.

To prove negligence, they will need sufficient evidence. This might include witness testimonies, medical records, citation reports, accident site examination reports, OSHA violation investigative reports and details of any equipment used.

If they make a claim against you for negligence, they may choose to hire a dedicated construction accident injury lawyer to handle their case. Filing a claim is increasingly an option, as many attorneys work on a contingency basis, which means they’ll only ever pay legal fees if their case is successful. If you are facing a claim, you should also seek legal advice, as a large compensation payout could significantly impact your business.

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email

California Supreme Court Declines to Create Exception to Privette Doctrine for “Known Hazards”

Tracy D. Forbath | Lewis Brisbois Bisgaard & Smith

In Gonzalez v. Mathis (Aug. 19, 2021, S247677) __ Cal.5th___, the California Supreme Court reversed an appellate decision holding that a landowner may be liable to an independent contractor, or the contractor’s workers, for injuries resulting from “known hazards,” as running contrary to the Privette doctrine.

In Gonzalez, the contractor, who specialized in washing skylights, slipped and fell while accessing the landowner’s particularly hard to reach skylight from a narrow retaining wall that was allegedly covered in loose gravel and slippery. (Slip opn., p. 3.) While the trial court initially granted the landowner summary judgment pursuant to the Privette doctrine, the appellate court reversed and held that the landowner had a responsibility to take reasonable safety precautions where there was a known safety hazard on the landowner’s premises. (Id. at p. 6.) Whether the landowner could have taken various safety precautions also raised disputed issues of material fact precluding summary judgment. (Ibid.)

However, the California Supreme Court concluded that no broad, third exception to the Privette doctrine lies; “unless a landowner retains control over any part of the contractor’s work and negligently exercises that retained control in a manner that affirmatively contributes to the injury [citation], it will not be liable to an independent contractor or its workers for an injury resulting from a known hazard on the premises.” (Slip opn., p. 2.)

The California Supreme Court also contemplated landowner liability with an eye towards preserving a landowner’s ability to obtain summary judgment under the Privette doctrine. The court noted “it would be difficult, if not impossible, for a landowner to ever obtain summary judgment were [it] to adopt a rule that subjects landowners to potential liability where there are no reasonable safety precautions available to protect against a known danger.” (Slip Opn., p. 22.) Indeed, whether an independent contractor could have adopted reasonable safety precautions to protect against a known hazard will “almost always” raised issues of material fact. (Ibid.) Further, the court concluded that contractors are in a better position to assess whether they can protect their workers against a known hazard on a worksite and whether that work can then be performed safely. (Id. at p. 28.) Thus, the court held that a landowner delegates to an independent contractor all responsibility for workplace safety, including “the responsibility to ensure that the work can be performed safely despite a known hazard on the worksite.” (Id. at p. 32.)