Injuries To Unborn Children Raise WC Risks

If an employee is injured during the course of employment, that employee in most circumstances will receive scheduled workers' compensation benefits. In return for these benefits, the injured employee gives up the right to sue an employer.

But what happens if the employee is pregnant at the time of injury and the fetus is injured? Does the fetus have a right after birth to sue the employer, or is workers' comp the exclusive remedy?

This is a question that some courts have addressed, and the answer has implications for employers' insurance coverage.

An example is Snyder v. Michael's Stores, Inc., 945 P.2d 781 (1997), a California Supreme Court case. The parents of a minor sued the mother's employer on behalf of the child, seeking damages for physical injuries resulting from the employer's negligence. The minor's lawsuit claimed she was injured in utero when the mother was exposed to and breathed in carbon monoxide in amounts that were toxic to both mother and fetus.

The trial court granted the employer's demurrer on the grounds that the action was barred by workers' comp being the exclusive remedy. An appeals court reversed this decision, and when the state's supreme court reviewed the case, it agreed with the appeals court.

The state supreme court noted that the only question was whether the fetal injuries occurring at the mother's workplace were remedied solely, if at all, through the workers comp system. The court reviewed the workers' comp law and said that a child's claims deemed collateral to or derivative from an employee's injuries are under workers' comp.

~However, the court went on, this derivative injury rule applies only if the child were seeking damages for the mother's work-related injuries, or if the claim necessarily depended on the mother's injuries.

In this case, the minor herself was exposed to carbon monoxide and was injured -- an injury separate and distinct from the mother's injury. Therefore, workers' comp is not an exclusive remedy for the child, and she can sue the employer as a third party injured through the negligence of the employer.

Another example is Meyer v. Burger King Corp., 2 P.3d 1015 (2000), a decision by the court of appeals in Washington State. In this case, a pregnant employee fell while at work, and hit her lower abdomen on a table. That night, the woman went to the hospital and had a baby girl; the baby had severe mental and physical disabilities.

The parents sued the employer in the baby's name, claiming injuries due to unsafe working conditions. The employer said that the workers' comp law barred negligence actions by family members of covered employees.

The trial court decided that the minor's injuries in utero were independent of the mother's injuries and so the claim was not barred by the workers' comp law. The employer appealed.

The appeals court upheld the lower court's ruling and said that if a third party suffers her own injuries, she has her own claim against the alleged negligent party. The court decided that the derivative injury rule does not apply unless the child's claim is merely collateral to the work-related injury of the parent, a conclusion that rests on the legal or logical basis of the claim rather than on the biological cause of the fetal injury.

Echoing the court from the Snyder case, this court said that the child suffered a separate and distinct injury from the mother, even though the child's injury occurred at the same time as the mother's. The girl's claim did not arise out of the injury to the mother, so workers' comp rules do not apply to the girl.

~Both the Snyder and the Meyers decisions listed cases from other states?Colorado, Indiana and Louisiana?that concur with the opinion that injuries suffered by a fetus give rise to claims separate from those of the employee-mother. If this is the legal trend, an employer should know if his liability insurance policies will offer any coverage.

The workers' comp policy can be dismissed quickly. The thrust of the decisions noted in this article is that a newborn has a claim against the mother's employer, not as an employee but as a separate and distinct party.

Workers' comp insurance is for benefits required by the state workers' comp laws, and the employers liability insurance part of the workers' comp policy applies to damages the employer must pay because of bodily injury to employees. Employers liability insurance does apply to consequential bodily injury to a child, but this coverage is based on bodily injury to the employee-parent. And, again, the court cases stress that the claims of a newborn are due to the baby's own injuries and do not arise from injury to the employee-parent.

As for any duty to defend, that is governed by the lack of coverage under the workers' comp policy. The policy explicitly declares that the insurer has no duty to defend a claim, proceeding or lawsuit that is not covered by the insurance policy.

The commercial general liability coverage form does offer an employer hope for some insurance protection against the bodily injury claims of newborns. The CGL form has an employers liability exclusion, but this applies to bodily injury to an employee, and not to bodily injury suffered directly by a newborn. The employer must be wary, though, of other exclusions that could apply to the newborn's claims.

For example, the claim in the Snyder case was based on bodily injury due to the release of carbon monoxide. Carbon monoxide is a definite pollutant. The pollution exclusion on the CGL form applies to bodily injury arising out of the discharge, release or escape of pollutants at any site or location owned or occupied by any insured.

The employer's insurer in the Snyder case could justifiably use the pollution exclusion to deny coverage under the CGL form. And an employer's CGL form may have other, nonstandard exclusions that would prevent coverage for claims such as those in the Snyder and Meyer cases. Employers should read their CGL forms to see if there are any exclusions that might apply to the bodily injury claims of newborns.

The duty to defend under the CGL form is broader than the duty to pay damages. However, the CGL form does note that the insurer has no duty to defend the insured against any lawsuit seeking damages for bodily injury to which the insurance policy does not apply. If the insurer can use an exclusion, like the pollution exclusion, to successfully deny any coverage under the CGL form, the duty to defend the insured will end.

Thus, employers should be aware of the exposures they face if a pregnant employee is injured on the job. The employer's workers' comp policy will not help the insured employer in facing such exposures; the CGL form may.

In addition, an employer should not forget two more points: a newborn, as a minor, can bring a lawsuit at any time during his or her years as a minor; and the statute of limitations on personal injuries will not begin to run until after the minor reaches legal adulthood.

The workers' comp claims of an injured employee may amount to nothing when compared to the claims of the newborn who was injured while a fetus.