The Indemnity That the Employer's Liability Exclusion Swallows

Almost certainly not, and the reason is exclusion e. (Employer's Liability), not the AI endorsement's scope.

CG 20 10 04 13 does cover Talon for liability arising out of Summit's ongoing operations performed for Talon, and a fall during steel erection fits that grant. But the endorsement states it applies subject to all the terms and conditions of the policy, including the exclusions. Exclusion e. bars bodily injury to an employee of any insured arising out of and in the course of employment by the insured, or while performing duties related to the conduct of the insured's business.

What defeats the tender is exclusion e.(2), which extends the exclusion regardless of whether the insured is liable as an employer or "in any other capacity," and applies to any obligation to share damages with, or repay someone else who must pay damages because of, the injury. Talon's liability is derivative of the same injury to Summit's employee, so the exclusion reaches it.

A minority of jurisdictions have found ambiguity in how e. interacts with additional insured endorsements. A risk manager should not build a program on that argument. The contractual answer is that Talon's own CGL, not Summit's, is the policy that responds.

No - it addresses a different exclusion.

Exclusion b. (Contractual Liability) excludes liability assumed under contract, and it contains an exception for "insured contracts." A construction indemnity in which Summit assumes the tort liability of another party can be an insured contract, so exclusion b. is genuinely switched off. But exclusion b. was never the obstacle.

Exclusion e. (Employer's Liability) contains no insured contract exception. It is a standalone bar, and the insured contract carve-back in b. cannot reach it. The sequencing is exactly where candidates go wrong: they correctly identify the insured contract analysis and stop, without checking whether another exclusion independently applies to the same injury.

Two further problems sit on top of the insurance answer. First, many states have anti-indemnity statutes that void or limit a promise to indemnify a party for that party's own negligence; Talon is accused of its own negligent site supervision, so the indemnity may be unenforceable whatever the policy says. Second, the indemnity should be read to see whether it is limited to the extent of Summit's negligence, which would further constrain recovery here.

The coverage conclusion stands: Summit's CGL pays nothing for Reyes's injury.

Talon's own CGL responds. Reyes alleges Talon's negligent retention of control and failure to enforce fall protection - Talon's own conduct at its own project - so Talon's insurer owes a defense and indemnity, subject to its limits and any self-insured retention. The entire risk-transfer structure Talon built with Summit does not move that loss.

What Talon should have negotiated:

• Employer's liability (Part Two of the workers' compensation policy) limits high enough to matter, and evidence of them. Part Two, not the CGL, is the line that responds when a subcontractor's own employee is injured.
• A waiver of subrogation in Talon's favor and a waiver of the comp carrier's lien rights, so the comp carrier cannot come back against Talon for the $186,000 it paid.
• Recognition that removing exclusion e. for an additional insured is uncommon, negotiated case by case, and priced accordingly - not something to assume is included.
• Owner's or contractor's protective coverage, or a project-specific OCIP, where the exposure to a trade's employees is significant.
• Verification of the actual endorsement forms and edition dates rather than relying on the certificate.

Above all, Talon should manage the safety condition it retained the power to control. The cheapest risk transfer is not retaining the exposure in the first place.