Infinet Marketing Services v. American Motorist Ins. Co.
Labor Code section 3602, subdivision (d), allows an employer that leases or borrows an employee from another employer to fulfill its statutory obligations to obtain workers compensation insurance by contracting with the other employer for the other employer to obtain such coverage. In this case, three client companies allegedly leased workers from an employee leasing company pursuant to an agreement by which the employee leasing company was to obtain workers compensation insurance covering the leased workers. The client companies injured workers were later denied workers compensation coverage under the workers compensation policy allegedly obtained by the employee leasing company. The client companies sued the insurance broker that introduced the client companies to the employee leasing company. The insurance broker tendered its own defense to the employee leasing companys carrier contending it was a third party beneficiary of the workers compensation policy. When a defense was refused, the insurance broker cross complained against the insurance company claiming insurance bad faith. In these consolidated actions Court agree with the insurer that the insurance broker is not a third party beneficiary of the insurance contract.
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