I was chatting with a new prospect about his insurance policies and pointing out that his current policy had no Action Over coverage. I couldn’t have paid his office assistant to set this up any better, because she came in saying she just tripped over the pothole in the parking lot. So I asked my client, “What happens if she broke her ankle in that pothole?” He said, “Well, that’s a Worker’s Comp claim, right?” I answered, “Yeah, but what happens when she gets up a head of steam and says, ‘We’ve told this landlord a dozen times now to fix that pothole, and he never does,’ and she decides to sue the landlord? This is when the landlord then walks into your office with this lawsuit and your lease and says, ‘You’re going to hold me harmless and defend me for any and all liabilities,’ and he’s going to hand you that lawsuit and tell you to defend him. What are you going to do with it?”
I told him that he’s not going to turn it into his General Liability Company because they’ve already told him they won’t cover these kinds of claims. This is an Action Over claim. For an employee, their sole source of remedy for a work-related injury is supposed to be a Worker’s Comp policy. In other words, they’re not supposed to be able to sue the employer as well. But in cases like this, they can sue anybody else, so they’re going after the landlord. That’s how an Action Over claim happens.