As a southern Illinois personal injury attorney, I deal with insurance companies routinely. Insurance companies are the main source of payment of serious personal injury claims, because few individuals and many companies have the wealth to simply pay an expensive injury claim outright. But insurance companies often fight these claims, even when they don’t have a strong legal basis for doing so, because they lose money when they actually pay the claims they’ve contracted to pay. That’s why I was interested to see the Seventh U.S. Circuit Court of Appeals decision in Atlantic Casualty Insurance Company v. Rybaltowski et al.. Robert Rybaltowski was injured at a job site at a time when it wasn’t clear whether he was a contractor yet; he later sued. The Seventh Circuit ultimately sent the case back to district court to determine whether the contract applied.
Rybaltowski worked for Raincoat Solutions, a waterproofing company bidding on a job caulking an apartment building being constructed in Downers Grove, Ill. Prince Contractors accepted Raincoat’s bid subject to investigating whether the caulker could do the work, so Raincoat took Rybaltowski to the site to caulk a few windows. It did not expect to get paid. Raincoat and Prince ultimately signed a contract, but that took place shortly after a beam supporting masonry equipment fell on Rybaltowski, causing the injuries that underlay his lawsuit against Prince, Paszko Masonry, Chicago Masonry Construction and the apartment building’s company. Atlantic, Paszko’s insurer, sought a declaration that it had no duty to defend any of the companies. The district court granted this, finding that the policy excludes “contractors” and that Rybaltowski was such a contractor.
The Seventh Circuit disagreed. The insurance policy excludes contractors and employees of contractors from coverage for bodily injury arising out of performing services for which the insured (Paszco) may be liable. “Contractor” includes subcontractors, so the question, the court said, was whether Raincoat was either a subcontractor or performing services to Prince, a contractor, when the accident took place. If so, Rybaltowski is a “contractor” for policy purposes and is not covered. Noting that the contract is poorly drafted, the Seventh decided that more information is required. The court ultimately found that Rybaltowski’s demonstration work, essentially an application for the job, did not qualify as “services of any kind” because no contract was signed. Thus, he is covered if the defendant companies are additional insureds, and it remanded the case for the district court to determine this.
I was interested, as a Missouri head injury attorney, to see that the Seventh Circuit cast doubt on the usefulness of the policy. As it noted, most liability policies issued to construction companies don’t exclude coverage for subcontractors’ employees like Rybaltowski. This kind of unusually narrow contract language can invalidate a contract entirely, if the court finds that the coverage is therefore “illusory.” While that didn’t happen here—because the insurance would still cover injuries to passers-by and visitors to the job site—it’s clearly not in the public’s interest for insurance companies to issue policies that don’t cover the most likely injuries, leaving the construction company to go bankrupt and the injured person without redress. As a St. Louis injury lawyer, I would be pleased to see a court invalidate or limit the use of such policies.
Carey, Danis & Lowe represents clients across Missouri and southern Illinois who have suffered serious injuries because of someone else’s carelessness. If you’d like to talk to us about your rights and your legal options, call us today at 1-877-678-3400 or send us an email for a free consultation.
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