Executive Officers Considered Employees for Co-Employee Exclusions

Louisiana Court of Appeals, First Circuit, April 9, 2021

The plaintiffs brought suit on behalf of deceased against a number of manufacturers and suppliers of asbestos containing products allegedly causing asbestos-related lung cancer. The plaintiffs amended to add Arrowood Indemnity, successor of an insurer which issued a policy to Stone & Webster which was in effect from January 1, 1965 to June 2, 1971.

Arrowood moved for summary judgment asserting that the CGL policies contained employee exclusions which precluded coverage to Stone & Webster for the plaintiffs’ claims. Arrowood further claimed that the policies do not extend additional insured coverage to executive officers for injury, sickness, disease, or death of a co-employee. The parties conceded that the employee exclusion precluded coverage; the only remaining issue was whether the co-employee exclusion applied to the claims against the executive officers. The trial court granted summary judgment, determining that the co-employee exclusion applied. The plaintiffs appealed.

The plaintiffs asserted that because executive officers and employees were listed separately in one subsection defining insured under the policy, the co-employee exclusion only applies to “employees” and not executive officers.

The court noted that executive officers work for and are paid by the employer, and as such, are employees for purposes of exclusions from coverage based on employment. The court also indicated that the analysis would be different if executive officers were listed as named insureds under the policy. Because no executive officers were named, the court held that the plain language of the policy excludes coverage for executive officers under the co-employee exclusion and that Arrowood was entitled to summary judgment.

Read the full decision here.