Slip and fall does not arise from employment

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“To use worker’s compensation cases as precedent for construing the exclusion in the general liability policy is at odds with insurance law principle that we are to interpret the language of an insurance policy according to what a reasonable person in the position of an insured would have understood the words to mean.” Judge Thomas Cane Wisconsin Court of Appeals

The Wisconsin Court of Appeals held on Sept. 3 that an employee exclusion in a general liability insurance policy does not exclude coverage for an employee who fell on the premises before starting work.

Julie Aasen-Robles was an employee of the Lac Courte Oreilles Band of Lake Superior Chippewa Indians (LCO) and worked at LCO’s casino in the housekeeping department. On Dec. 31, 1998, Aasen-Robles slipped and fell on an icy patch of sidewalk while walking toward an employee entrance on LCO’s premises.

When she fell, Aasen-Robles was on her way to work and had not yet punched in or commenced work. Her injuries prevented her from returning to her job.

As a sovereign Indian tribe, LCO is exempt from worker’s compensation laws. However, LCO self-insured its employees to provide coverage for all work-related injuries or illnesses through Corporate Benefit Services of America (CBSA). LCO also had a general liability policy with St. Paul Fire & Marine Insurance Company.

The policy had a standard provision excluding coverage for employee injuries.

While CSBA initially concluded her therapy would be paid by its policy, the administrator later told Aasen-Robles her injuries were not work related because she was not “in the door” or “on the clock” when she fell.

Aasen-Robles eventually sued St. Paul. Sawyer County Circuit Court Judge Norman L. Yackel granted summary judgment in favor of St. Paul, and Aasen-Robles appealed. The court of appeals reversed in a decision by Judge Thomas Cane.

The policy exclusion states, “We won’t cover bodily injury to an employee of the protected person arising out of and in the course of his or her … employment.”

The court agreed with Aasen-Robles that the plain language of the exclusion does not exclude all employees from coverage all the time, but only bars coverage for employee injuries that arise out of and occur in the course of employment. The court further concluded that Aasen-Robles was not acting in the course of her employment when she was injured.

The court acknowledged that, pursuant to Makal v. Industrial Comm’n, 262 Wis. 215, 54 N.W.2d 905 (1952), and sec. 102.03(1)(c)2, for purposes of the worker’s compensation laws, an employee is in the course of employment when going to and from their employment while on the employer’s premises.

Nevertheless, the court concluded that Makal and the statute were irrelevant, because the tribe is not subject to worker’s compensation law.

The court noted that worker’s compensation laws must be “liberally construed in favor of including all services that can in any sense be said to reasonably come within it.” Severson v. Industrial Comm’n, 221 Wis. 169, 175, 266 N.W. 235 (1936). However, insurance policies are to be liberally construed in favor of the insured.

Accordingly, the court held that interpretations of worker’s compensation cases are not precedent for construing an exclusion in an insurance po
licy. The court reasoned, “Because of this liberal construction, to use worker’s compensation cases as precedent for construing the exclusion in the general liability policy is at odds with insurance law principle that we are to interpret the language of an insurance policy according to what a reasonable person in the position of an insured would have understood the words to mean.”

The court added, “Interpreting the exclusion from the standpoint of a reasonable insured and using the common, ordinary definitions of words a lay person would give them, we hold that Aasen-Robles’s injuries did not arise out of or occur in the course of her employment. The lay dictionary definition of ‘arise’ means ‘to originate from a specified source.’ ‘Course’ refers to the ‘act or action of moving in a particular path from point to point.’ And ‘employment’ is an ‘activity in which one engages and employs his time and energies … as … work.’ Putting the pieces together, a reasonable insured would understand an injury to be excluded under the employee exclusion if an employee suffers injuries originating from his or her job and while the employee is engaged in work. These facts are not present here, so the exclusion does not apply (cites omitted).”

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Despite acknowledging decisions from several other jurisdictions holding that employee exclusions are coextensive with worker’s compensation coverage, the court instead adopted the reasoning of a California case, Artukovich v. St. Paul-Mercury Indem. Co., 310 P.2d 461, 468 (Cal. App.2d 1957), in which the California Court of Appeals construed a similar exclusion in a general liability exclusion and held that it applied only where the employee was at the place of employment, during working hours, and actually engaged in employment duties at the time of the injury.

In rejecting the reasoning of the majority of jurisdictions, the court noted that they all focus on the identical language of the exclusions and the applicable worker’s compensation statutes. Rejecting that reasoning, the court stated, “as explained before, because LCO did not have a worker’s compensation scheme at the time of the injury and because they are not subject to Wisconsin’s worker’s compensation system, we conclude it would be inappropriate to apply worker’s compensation principles as precedent to construe the exclusion at issue.”

Accordingly, the court reversed.

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David Ziemer can be reached by email.