Coverage Practice Note: Enforcing The Employers’ Liability Exclusion in CGL Policies Against Claims of Temporary Employee Status – Part II



In Part I of this post, we described the challenge created by enforcement of the Employers’ Liability Exclusion in a CGL policy against a claim that the injured employee making a claim against the insured was a “temporary worker,” and therefore exempt by definition from the exclusion.  In Part II, we examine a game plan for successful enforcement of the exclusion.

The Law


While every jurisdiction has its nuances, there are some common elements to the applicable law of the temporary employee exception to the Employers’ Liability Exclusion.  The two most common areas of contention in the case law are the issues of control over the employees performance, and whether the putative temporary employee was “furnished” to the insured employer.

A majority of jurisdictions hold that unless a co-employer somehow is shown to have control over the decision to employ, or over  the parameters and/or the time, hours or compensation of  the putative temporary employee at the insured employer’s business, temporary employee status is not likely established.  See, e.g.,.  Empire Fire and Marine Ins. Co. v. Jones, 739 F. Supp. 2d 746 (M.D. PA. 2010); see also, Nautilus Ins. Co. v. Gardner, 2005 U.S. Dist. Lexis 4423 (E.D. Pa. 2005).

Was Employee Furnished?

By its express terms, the definition of temporary employee requires that the putative temporary employee be furnished in some way to the insured business owner:

“Temporary worker” means a person who [i]s furnished to you to substitute for a permanent “employee” on leave or to meet seasonal or short-term work load conditions.


Others seeking to avoid the Employers’ Liability Exclusion have argued that “furnished to” is a liberal and flexible concept, and can include  self-furnishing, or even a mere recommendation or endorsement by a co-employer to the insured business owner.   Both such arguments  have also been unsuccessful, however, in certain jurisdictions.  Empire Fire, supra Mendenhall, supra.

Let The Facts Fall Into Place

The facts more often than not will self-settle the case into the Employers’ Liability Exclusion — it is a broad one, and is designed to carve out a large space occupied by workers’ compensation insurance.  Moreover, the “temporary employee” definition is a narrow one, attempts to widen it notwithstanding.  Successful enforcement of this exclusion takes advantage of this exclusion/exception anatomy.

In the example from Part I of this post, there are no doubt facts which might be used to make an argument that the injured employee was in fact temporary, entitling the employer to defense and indemnity under the CGL policy.  The employee, the argument goes, was hired to replace another employee going on leave, and was “furnished” by way of the co-employers recommendation to the insured employer.

But the applicability of the Employers’ Liability exclusion lies in what admissions have been made, and what admissions can be obtained.   The insured employer’s examination under oath was free of any indication of even the suggestion of temporary employment.  The injured employee himself testified he did not believe the insured employer needed permission from a co employer to hire the employee, and admitted the co employer had no right of control over his decision to either accept the offer of employment, or the means by which he performed his work for the insured employer.

If the factual situation looks  by overview like something which should be covered by workers’ compensation insurance,  there is a fair chance that the Employers’ Liability Exclusion of the CGL applies to relieve the CGL insurer of the duties of defense or indemnity of the insured employer.

For more information on successful enforcement of CGL and other policy terms provisions, and exclusions at reasonable, stable monthly subscription fees,  reach  me at or 717-731-4800.


Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than three decades, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at or 717-731-4800.

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