General Casualty Insurance And Regent Insurance, Petitioners

This is an order from the California Court of Appeal, Second Appellate District, Division Seven (not a WCAB panel decision), arising from consolidated workers' compensation insurance coverage disputes. The dispute concerns whether special employees can be excluded from coverage under a special employer's workers' compensation insurance policy where general and special employers carry separate policies. The Court granted petitions for rehearing filed by American Home Assurance Company, RemedyTemp, Inc., and Jacuzzi, Inc. (joined by General Casualty Insurance and Regent Insurance) and took judicial notice of correspondence between American Home Assurance and the WCIRB regarding use of California Approved Form No. 11 (CAF-11) to exclude leased and temporary workers. The Court requested that the WCIRB and the California Insurance Commissioner answer four questions about excluding special employees from coverage. Both the WCIRB and the Insurance Commissioner responded that special employees may be excluded and Form No. 11 may be used for that purpose, provided the exclusion complies with applicable regulations and does not leave employees without workers' compensation coverage. The key principle, rooted in Insurance Commissioner Ruling 157 (1967), is that any limitation must be consistent with the Labor Code mandate that every employer fully secure its compensation liability.