Fellow Employee Exclusion

The fellow employee exclusion removes coverage for bodily injury one employee causes to a coworker arising out of and in the course of employment. The logic ties back to exclusive remedy: when a worker is hurt on the job, workers' compensation is meant to be the sole avenue of recovery, so the auto or liability policy is not expected to also defend the coworker whose negligence contributed to the injury. In a company-vehicle crash, this means the driving employee is not an insured for a claim brought by an injured passenger who is also an employee.

For a small-business buyer, the exposure this creates is easy to underestimate. Workers' compensation pays the injured employee's statutory benefits, but an injured worker, or the family in a fatality, may still sue the coworker driver personally in tort. Because of the exclusion, that coworker has no defense or indemnity from the company's auto policy, and the individual's own assets are on the line. This is a classic action-over and employee-liability gap that overlaps with employers liability under the workers' comp program.

The practical nuance is that the exclusion is frequently buyable back. Many carriers offer a fellow-employee coverage endorsement that restores protection for the co-employee, and businesses with crews riding together in company vehicles should strongly consider it. Coordinate this decision with your workers compensation and employers-liability coverage so a single job-site accident does not leave a valued employee personally exposed to a lawsuit the policy was assumed to cover.