Reasonable Expectation of Insured Trumps Employee Exclusion in a Pennsylvania Court

In United States Steel Corp. v. Nat’l Fire Ins. of Hartford, several employees performing maintenance work on behalf of an independent contractor were injured during explosions at a plant owned by United States Steel Corp.  The employees filed suit against United States Steel Corp.  Defendant insurance companies issued policies to the independent contractors, naming United States Steel Corp. as an additional insured.  When the insurers disclaimed, United States Steel Corp. commenced a declaratory judgment action against them.  The defendants moved for judgment on the pleadings, arguing that an employer’s liability exclusion excluded coverage for the bodily injury claims raised by the employees.  The court disagreed, and concluded the insured had the reasonable expectation that each would be covered if sued for injuries to an employee of the other insured. The court reasoned it would be of little benefit to United States Steel Corp. to be an additional insured if it was also required to obtain its own insurance for suits by employees of any other named insured against the plaintiff.

Thanks to Colleen Hayes for her contribution to this post.