Action-Over Claim

An action-over claim (also called a third-party-over action) is a lawsuit in which an employee injured on the job — who has already collected workers compensation from their own employer — sues a third party such as the general contractor or property owner, and that third party then "actions over" by seeking indemnity from the injured worker's employer through a contractual hold-harmless agreement. In effect, an employee's injury that should have ended with the workers-comp payment loops back around and lands on the employer anyway, via the subcontract.

This matters because it drives a hole through the exclusive remedy doctrine, which normally bars an employee from suing their own employer for a workplace injury. The employee cannot sue the employer directly, but the general contractor can — through the indemnity clause in the subcontract. Two coverages respond: the contractual-liability grant of the CGL and, critically, Coverage B employers liability on the workers-comp policy. The exposure is severe in states with strict labor laws (New York's Labor Law is the classic example), where a single fall can generate a multimillion-dollar action-over verdict against a small sub.

The practical defense is contractual and must be arranged before work starts. A subcontractor should expect to name the general contractor as an additional insured on a primary and non-contributory basis and to provide a waiver of subrogation. Just as important, watch for an action over exclusion endorsement, which some insurers attach to CGL or employers-liability policies to strip out exactly this coverage — accepting one can leave you personally exposed to the indemnity obligation you signed. Always confirm the exclusion is absent (or bought back) before signing an indemnity-laden subcontract.