Third Party Action Over
Why you need to work with your GDI insurance broker to make sure your general liability insurance is right for the subcontracts you are signing. Failure to get this one item correct can cost you your company! Ask yourself when the last time your insurance broker asked to read the contracts you are signing or even mentioned the Risk of Action Over to you. Then call GDI 888-991-2929
What is Action Over, also known as Third Party Action Over?
A type of action in which an injured employee, after collecting workers compensation benefits from the employer, sues a third party for contributing to the employee's injury. Then, because of some type of contractual relationship between the third party and the employer, the liability is passed back to the employer by prior agreement. Additionally, there are instances in which the third party can circumvent the exclusive remedy doctrine of workers compensation and enjoin the employer in the action. Depending on the nature and allegations of the action, coverage may be afforded under the contractual liability section of the employer's commercial liability policy or the employers liability section of the employer's workers compensation policy.
Example: You are a sub contractor. You send your crew to work at a job site, and one is injured. You have workers comp to protect you? Maybe. But what happens if that employee now sues the prime contractor and project owner for their injuries? Will your general liability insurance defend you and pay if you are responsible for the loss if you assumed it by contract?
Make sure you talk to your GDI Insurance Broker about Action Over and Third Party Action over. It actually doesn't cost more to get the right coverage! 888-991-2929