8.9 Cross-Employee Exclusion

• Jurisdiction: Arizona

Commercial general liability policies typically exclude coverage for liability claims that arise because the conduct of one employee results in injury to a second employee. This type of exclusion was discussed and enforced by the court in Stearns-Roger Corp. v. Hartford Accident & Indemnity Co.^[417] The exclusion considered by the court read as follows:

This insurance does not apply:

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(2) . . . to personal injury to any employee of the Named Insured arising out of and in the course of his employment by the insured . . .^[418]

In Stearns-Roger, the name insured was an engineering construction firm that entered into a long-term construction agreement with Phelps-Dodge for work to be performed at Phelps-Dodge Morenci substation. Pursuant to the construction agreement, Stearns agreed to procure comprehensive public liability insurance. In addition, Stearns also obtained workers' compensation coverage in a separate policy from Hartford. During the course of construction, two employees of Stearns were injured and filed suit against Phelps-Dodge. The injuries occurred while doing Stearns work, yet each worker contended that the negligence was that of Phelps-Dodge. Phelps-Dodge, in turn, tendered the defense of the action to Hartford pursuant to the Hartford-Stearns insurance policy. Hartford refused to...