U.S. Court of Appeals defines "temporary worker" exception to leased worker exclusion

In Scottsdale Ins. Co. v. Torres, a recent decision of the United States Court of Appeals for the First Circuit, the court considered the "leased worker" exclusion to a CGL policy. Like most CGL policies, the policy at issue excluded personal injury claims of employees of the insured (because employees are covered by the worker's compensation law). The policy defines employees as including "leased workers."

Pursuant to an exception to the exclusion, "temporary workers" are not considered "leased workers." The policy defines temporary workers as workers "furnished to [the insured] . . . to meet seasonal or short-term workload conditions."

The court held that the actual length of time the worker ends up working for the insured is irrelevant to that definition; what matters is whether, at the time that the worker was originally furnished to the insured, the intent was that the worker fulfill short-term workload conditions.

The court also held that a placement that was for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court denied summary judgment to both sides, and remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its workflow.