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In re Essex Ins. Co. – Work Amputation Victim Fights for Insurance Coverage

It is an unfortunate reality that far too many employers and insurance companies in Georgia prioritize profits over people. Even in cases where a worker has suffered a devastating and lifelong injury, it’s not uncommon for these entities to deny claims for coverage, forcing the worker to engage in litigation for rightful compensation.
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In the recent case of In re Essex Ins. Co., before the Texas Supreme Court, employer and insurer are trying to avoid paying compensation to a man who lost his arm while operating a tortilla machine.

The company didn’t have workers’ compensation coverage, but it did have a general liability policy. Both the worker and the company say he was an independent contractor – not an employee – which the insurance company disputes. This point hasn’t yet been resolved, but the state supreme court ruled the worker has to prove the tortilla company is liable for the injury before he can pursue a separate claim against the insurance firm.

Our Atlanta workers’ compensation attorneys understand these cases can be complicated as there are numerous competing interests at play. We work tirelessly to ensure your interests and legal rights are asserted and protected.

In the Essex Ins. Co. case, the company was a food processing plant that produced tortillas. At the time of the incident, the man was trying to take balls of dough from the machine when his sleeve caught in an open chain link inside the casing. As a result, he was pulled under the nip point, resulting in severe injuries to his arm that required amputation.

The company, which denies negligence, did not have workers’ compensation insurance coverage. (Texas, unlike Georgia, does not require employers to secure such coverage.) That meant the only option available to this worker is to pursue damages from the company’s general liability insurer. Both the company and the worker say he was classified as an independent contractor, leaving him free to pursue a claim. However, the insurance company denied it, saying the worker is an employee and thus not entitled to collect damages under the general liability policy.

Nonetheless, the insurer agreed to indemnify the company in the litigation. In turn, the worker sought a settlement with the insurance company. When the company refused a settlement, the worker added insurer as a defendant to the case.

The case went through several appeals, but ultimately, the Texas Supreme Court ruled the worker could not add insurer as a defendant until the company’s liability was proven. Only then would the insurer be responsible to provide coverage for the injury.

Specifically, the state’s “no direct action” rule bars plaintiffs from suing a defendant’s liability insurer directly under the policy until defendant’s liability has been established. To take both actions simultaneously, the court found, would put the insurer and the employer at odds with competing interests.

In Georgia, too, direct action against a liability insurer generally isn’t allowed. However, there are a few exceptions. Per O.C.G.A. 40-2-140(c)(4), for example, insurers of trucking company carriers may be subject to direct action by injured parties.

If you are unsure about the best route to take in collection of damages for work-related injuries, call us today.

For information on Atlanta work injury compensation, contact J. Franklin Burns, P.C., at 1-404-303-7770.

Additional Resources:
In re Essex Ins. Co., Nov. 21, 2014, Texas Supreme Court
More Blog Entries:
Friebel v. Visiting Nurse – Dual Intent Doctrine Struck Down in OH, Nov. 2, 2014, Atlanta Workers’ Compensation Lawyer Blog