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Brooks Schuelke
Brooks Schuelke
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Worksite Injury Issue #1 — Is There Worker's Compensation Insurance?

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As I mentioned in an earlier post, I intend to use a recent Austin construction accident as a case study to highlight some of the issues in worksite injury cases.  In that accident, Chatsworth Products was doing construction work on its plant.  It hired a general contractor, who in turn hired L&O Electric to perform subcontract work.  The injured party was an employee of L&O Electric and was killed when he was crushed between a wall and a metal cage on the front of a forklift.  Presumably, someone drove the forklift and crushed the worker.  The articles do not say who employed the driver of the forklift so we’ll make different assumptions for this series of posts.  I am going to assume that the only act of negligence was the driving of the forklift.  In the real world, there may be many other issues that contribute to the accident (history of accidents on the site, general contractor allowing the subs to not follow safety protocol, etc), but for purposes of these posts, I’m just assuming a one-time accident and safety violation and that the only entity liable is the one that employed the forklift driver.

In all of these on-the-job injury cases, the first question to determine is whether there is a worker’s compensation policy that bars the plaintiff from bringing the claim.  Under the Texas worker’s compensation system, if an employer has worker’s comp then the worker’s comp is the exclusive remedy available to worker, and the worker can’t sue his employer.  One of the keys to this is that for the worker’s comp to be the exclusive remedy, it must be a true worker’s comp policy.  Many employers do not want to pay for true worker’s comp policies and instead offer an alternative.  These are often called accident policies or something similar.  These type of policies do not prevent claims from being filed.

A worker’s comp policy can generally be purchased in one of two-and-a-half ways.  First, the employer that has hired the employee can purchase the worker’s comp policy.  In our case, if L&O purchased the insurance then the worker couldn’t sue L&O.  However, that policy would not protect others.  Therefore, if the person that was driving the forklift was employed by the general contractor, another subcontractor or even the property owner, then the employee would still be able to sue any of those entities.

Another popular situation is when the general contractor (or the property owner) purchases a worker’s compensation policy that covers all of the employees of all of the subcontractors.  In this situation, courts have held that the worker’s comp policy provides protection for the general contractor and all of the subcontractors.  Thus, if the general contractor in our case purchased a worker’s comp policy to cover everyone, then the L&O worker wouldn’t be able to sue the general contractor or any of the other subcontractors, even if one of their workers was the one that was driving the forklift.

And then there is the 1/2 situation.  What if the premises owner, Chatsworth Products, was the one that purchased the worker’s comp insurance, and what if a Chatsworth employee was driving the forklift for regular Chatsworth business and ran over the worker?  Is Chatsworth protected by that insurance policy?  The answer is, “We don’t know.”  In January 2007, the Texas Supreme Court was faced with this situation and decided that because the premises owner purchased the policy then it was the general contractor, as defined in the statute, and was protected.  However, that case has received heavy criticism, and the Supreme Court has withdrawn the opinion.  We won’t know how this hypothetical should be decided until the Supreme Court releases its new opinion.

So that’s the first question that must be asked in all construction or other on-the-job injuries.  The answer to that question will determine whether a claim is even possible.

And I’ll add a disclaimer.  This information is general and doesn’t create an attorney-client relationship. If you are faced with a similar situation call us or another attorney to get advice on your specific situation.