General Contractor Deserves Workers' Comp Liability Coverage

April 6, 2009 ( - The Texas Supreme Court has ruled that a general contractor providing workers' compensation insurance to a subcontractor cannot be sued for negligence by that subcontractor's employees.

The Lone Star state’s high court ruled that Entergy Gulf States was covered under a protection clause in the Texas Workers’ Compensation Act’s definition of “general contractor.” Not only that, the justices asserted, but because plaintiff John Summers was covered by a workers’ comp policy purchased by Entergy, an electric power company, Summers could not then turn around and sue Entergy.

According to the opinion, Baton Rouge, Louisiana-based International Maintenance Corp. (IMC) was a subcontractor for Entergy and had workers, including Summers, at Entergy’s Bridge City, Texas, plant.

The court said Entergy provided workers compensation insurance covering IMC employees.   Summers was injured on the job in 2001 and received benefits under the policy purchased by Entergy, according to court documents, and then sued Entergy for negligence to obtain additional compensation.

The trial court ruled in favor of Entergy, while the appellate court ruled in favor of the worker. Entergy took the matter to the Texas Supreme Court.

"A general contractor is a person who takes on the task of obtaining the performance of work," the majority wrote in its opinion. "That definition does not exclude premises owners; indeed it describes precisely what Entergy did…Therefore, we conclude that a premises owner can be a general contractor under the definition provided in the act."

The opinion is available  here .