Priya's Bakery: Ohio's State Workers' Compensation Fund Meets a CGL
Priya owns a 12-employee bakery in Columbus, Ohio. She carries a commercial general liability occurrence form with $1M/$2M limits, a $10,000 deductible, and employer's liability limits of 100/500/100. BWC quotes a workers' compensation premium that she considers high, and she tells her agent she wants to move the coverage to "one of your private carriers" instead. Two weeks later a mixer guard fails: an employee loses two fingers, and a delivery driver from another company is burned by a spilled pot of caramel on the loading dock. Priya's bookkeeper also finds that the agency never returned her signed BWC application.
1. Can the agent place workers' compensation with a private carrier for Priya?
Read the worked answer
No. Ohio is a monopolistic state fund state for workers' compensation. Private insurers do not write Ohio workers' comp. An Ohio employer covers its obligation by:
- Paying premiums to the Ohio Bureau of Workers' Compensation (BWC), or
- Qualifying as a self-insured employer with the BWC.
Consequences the agent must spell out rather than dodge:
- Quoting or "placing" private workers' comp would be the sale of unauthorized coverage, exposing the agent to license discipline and an E&O claim.
- If Priya drops or never perfects BWC coverage, the employer is exposed to direct suit by injured workers, plus BWC penalties for lapse - exactly the risk workers' comp exists to remove.
- The unsigned, unreturned BWC application is now urgent. The agency should not hold client-signed documents; return or file them and document the date.
On the premium objection, the honest answer is experience rating, safety programs, and classification review - not a different carrier.
2. Which policy responds to the injured employee, and where does the CGL stop?
Read the worked answer
BWC responds first. In Ohio, workers' compensation is the employee's exclusive remedy for a workplace injury, except in narrow cases (e.g., an intentional tort).
The CGL does not pay the employee's medical bills or lost wages. The CGL contains an employer's liability exclusion for bodily injury to an employee arising out of and in the course of employment. That exclusion is not the end of the story, because the form buys back part of the exposure through employer's liability coverage: 100/500/100 in Priya's policy. Part Two responds only to suits for damages the WC statute does not cover - an intentional-tort claim, or a third-party action - never to benefits BWC already owes.
Layered answer:
- Lost wages and medical care: BWC
- Suit by the employee alleging an intentional tort: employer's liability, up to $100,000 per occurrence
- If Priya had let the BWC coverage lapse, the employee's direct suit might fall outside the employee exclusions in some circumstances, but the CGL still would not act as a substitute WC policy, and the $10,000 deductible would apply.
3. The delivery driver from the other company is burned. Is the CGL triggered, and what reduces or complicates the payment?
Read the worked answer
Yes - the CGL responds. The driver is not Priya's employee, so the employer's liability exclusion does not apply, and the injury occurred on her premises during operations.
Path through the form:
- Coverage A, bodily injury, premises and operations
- Occurrence form: injury during the policy period from an accident, so no retroactive-date analysis is needed
- $1,000,000 each occurrence, less the $10,000 deductible
Complications to work through:
- Other insurance / subrogation. The driver's own employer's BWC or the driver's health carrier may pay first and seek reimbursement. The CGL typically pays as primary for the tort claim but the carrier will pursue subrogation against the at-fault party.
- Who else is at fault. If the mixer guard was defectively manufactured, the carrier may pursue the manufacturer, and Priya's claim may be reduced by comparative fault.
- CGL does not cover the driver's own employer's obligation to him - that is the other employer's WC exposure, not Priya's.
- Contractual risk transfer. Check the delivery contract for an indemnity and additional insured requirement; if Priya agreed to indemnify the delivery company, contractual liability coverage matters and the certificate of insurance should have been issued at signing.