Employer’s liability exclusion in standard CGL policy applies to “statutory employees”

Contractors who sublet out a portion of their work are considered “statutory employers” of their subcontractor’s employees under the Worker’s Compensation Act. See 440.10, Florida Statues. The statutory relationship is not contingent upon the employer actually securing worker’s compensation coverage for the employee. Fla. Ins. Guar. Ass’n, Inc. v. Revoredo, 698 So. 2d 890, 892 (Fla. 3rd DCA. 1997). Rather, it is the creation of the statutory relationship that requires the contractor to secure workers compensation coverage for the employee. Id.

Courts in Florida, and federal courts applying Florida law, have treated these “statutory employees” identical to actual employees in relation to standard “employer’s liability” exclusions in general liability policies. Id. See also Endurance Am. Specialty Ins. Co. v. United Constr. Eng’g, Inc., 343 F. Supp. 3d 1274, 1281 (S.D. Fla. 2018), aff’d, 786 F. App’x 195 (11th Cir. 2019). Thus, the courts have held that the “employer’s liability” exclusion will apply to bar coverage for injuries to “statutory employees,” of the insured.

Courts have applied the “employer’s liability” exclusion to these statutory employees, regardless of whether the insured contractor actually secured worker’s compensation coverage for the statutory employee. See Revoredo at 892.

In Revordo, the court stated,” The logic in the exclusion from coverage of both types of employees is simple and compelling: the only coverage intended, and for which the premium has been paid, is the liability of the insured to the public, as distinguished from liability to the insured’s employees whether or not they are protected by the workers’ compensation law.”