Question: I got an email from an extremely nervous elementary teacher who is a compensated independent contractor coaching volleyball for a charitable organization after school. She was advised by the league that she was covered with CGL insurance by the organization. I advised her to get coach's liability insurance because she is an compensated independent contractor. Please advise..who's right or wrong?
Answer: I'm going to assume that the league has a standard ISO Commercial General Liability Coverage Form (CG 00 01 12 07). Section II--Who Is An Insured states:
1. If you are designated in the Declarations as:
a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.
b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business.
c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers.
d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders.
e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees.
2. Each of the following is also an insured:
a. Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees," other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for:
(1) "Bodily injury" or "personal and advertising injury":
(a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business;
(b) To the spouse, child, parent, brother or sister of that co-"employee" or "volunteer worker" as a consequence of paragraph (1)(a) above;
(c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in paragraphs (1)(a) or (b) above; or
(d) Arising out of his or her providing or failing to provide professional health care services.
(2) "Property damage" to property:
(a) Owned, occupied or used by,
(b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by
you, any of your "employees," "volunteer workers," any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company).
Under these terms, the league, its executive officers, directors, volunteers and employees are all insureds. Whether or not the teacher who contacted you is an insured depends on whether or not she can reasonably be considered an employee of the league. If she’s an employee, then the league’s CGL policy covers her; if she’s not, then she needs to get her own coverage. The CGL policy’s definition of “employee” does not help, so a court would probably look at how other organizations (the IRS, the New York Workers’ Compensation Board) would label her. The WCB has a list of 10 criteria for determining an independent contractor on its Web site, as does the IRS. As insurance guys, the determination of whether someone is an employee or independent contractor is above our pay grade, but at least you can refer the teacher to this information so she can make her own determination. If she doesn’t want to take the chance, she might want to just buy her own policy.
