August/September 2021  Volume 19, Number 4        

books on shelves

5 Exceptions to the Exclusive Remedy Rule

Workers compensation insurance generally shields employers against any tort liabilities. But not always.

"Exclusive remedy" is shorthand for the bargain between employees and employers that exists in the workers compensation system where employees give up their right to sue employers in exchange for no fault insurance against any injuries they incur.

However, there are several exceptions to the exclusive remedy rule.

  1. Wrongful death — The family of a deceased worker may file a common-law claim seeking damages in addition to the death benefit paid by workers’ compensation if the cause of the employee’s death was the result of willful and negligent disregard for the safety of employees. This is currently the approach being taken in several COVID-19-related deaths.
  2. Fraudulent concealment — this exception applies when an employer conceals the connections between an employee’s injuries and the employer’s wrongdoing. Examples of this are the harm caused by exposure over time, such as exposing employees to asbestos, toxic chemicals and other health hazards. The exception requires actual knowledge on the part of the employer that its actions were harmful.
  3. Third-party liability (dual capacity) — A few different scenarios may arise. If the employer knowingly modified equipment in such a way as to cause negligent harm (sometimes referred to as the “power press” exception because of several incidents involving “removing a guard or failing to install one at the point of operation”).
    • If the employer is the manufacturer of the equipment, the employee may be able to sue the employer in its capacity as the manufacturer, a classification distinguishable from its role as employer.
    • In another type of situation, an employee may get injured while on the employer’s premise not as an employee but as a guest or customer — such as while eating in a restaurant or as a patient in a hospital. In both situations, the “exclusive remedy” defense has been successfully challenged.
  4. Fellow worker liability — Workers’ compensation laws prohibit lawsuits against co-workers for injuries resulting from the co-worker’s negligence. But if a co-worker intentionally injures another employee, the injured victim can sue the co-worker if the conduct is willful, wanton, or reckless. In these situations, the employer is not necessarily liable, but an employee may also bring suit against the employer if it’s alleged that the employer has acted affirmatively by somehow ratifying the assault of the employee by a co-employee.
  5. Uninsured Employer — In many states where workers compensation is mandatory, employees may bring suit against their employers for failing to provide workers compensation insurance. This is true in California, for example, where, according to California statutes, “The price that must be paid by each employer for immunity from tort liability is the purchase of a workers’ compensation policy.” Of course, there must almost be an injury involved. The Veen Group, LLC, workers compensation plaintiff attorneys, advises its clients: “When you bring a civil claim against an uninsured employer, be sure to include in the complaint allegations of employer negligence and the employer’s failure to secure workers’ compensation insurance under Labor Code section 3706 as authority to bring suit to avoid a demurrer.”

The good news is that these exceptions are rare and if an employer is sued in tort for any of them, there is usually coverage in part II of the workers compensation policy, which is referred to as Employer’s Liability.

[return to top]





In this issue:

This Just In...

Workers Comp Industry Remains Healthy

Employers Face Wrongful Death Claims from Pandemic

5 Exceptions to the Exclusive Remedy Rule

More Evidence In Favor of Evidence Based Medicine



The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2021 Smarts Publishing. Tel. 877-762-7877. httpss://