The New Jersey Supreme Court recently delivered a decision in Rodriguez v. Shelbourne Spring, LLC, clarifying the extent of an insurer’s duty to defend an employer against workplace injury claims. The Court concluded that Hartford Underwriters Insurance Company was not obligated to defend SIR Electric LLC against claims filed by an injured employee, as all allegations were either excluded under the Workers’ Compensation Act or explicitly barred by the policy.
The plaintiff, Dionicio Rodriguez, was injured while working for SIR and received workers’ compensation benefits under SIR’s policy with Hartford. He subsequently filed a lawsuit alleging negligence, gross negligence, recklessness, and intentional misconduct. Hartford declined to defend SIR, citing exclusions in its policy for both negligence-based and intentional injury claims. The Court agreed, finding that Rodriguez’s negligence claims fell under the Workers’ Compensation Act’s exclusivity provision, while his intentional wrong claims were excluded by the policy’s Enhanced Intentional Injury (EII) exclusion.
The Court emphasized that workers’ compensation is the exclusive remedy for most workplace injuries, except in cases involving “intentional wrongs” as defined in Laidlow v. Hariton Machinery Co. It also upheld the validity of Hartford’s EII exclusion, which explicitly precludes coverage for injuries substantially certain to result from intentional conduct. This exclusion, approved by the Department of Banking and Insurance in 2007, was found to be clear, unambiguous, and compliant with prior case law, including Charles Beseler Co. v. O’Gorman & Young, Inc.
For employers and insurers, this decision underscores the importance of clearly delineated policy exclusions. Employers should ensure they understand the limits of liability coverage, particularly for claims arising from workplace injuries. Meanwhile, insurers should continue to draft and update policy language to align with legal precedents and regulatory approvals. By affirming the decision, the Court reasserted the balance between the Workers’ Compensation Act and employers’ liability policies. The ruling highlights the need for a well-defined scope of coverage and exclusions, reinforcing workers’ compensation as the primary remedy for workplace injuries.
The Rodriguez decision can be found here.
For additional information, contact Robert J. Cahall, Esq., Glen Shikunov, Esquire, and/or Igor Konstankevich, Esq.
