Ruling SL015-2025 of January 22, 2025, issued by the Labor Cassation Chamber of the Supreme Court of Justice (hereinafter, the “Court”), decided on a cassation appeal filed by a company against the ruling that held it jointly and severally liable for the death of a worker employed by a consortium responsible for an infrastructure project.
The employing company was both the policyholder and the insured under a non-contractual civil liability insurance with employer’s liability coverage. Consequently, it called the insurer into the proceedings under a guarantee.
Dispute:
The dispute revolved around employer liability arising from a workplace accident in which a worker died while executing an infrastructure project for the company that filed the cassation appeal. Regarding insurance matters, the issue under review was whether the non-contractual civil liability insurance included employer’s liability coverage, which provided indemnification for liability under Article 216 of the Substantive Labor Code (hereinafter, the “SLC”). The insurer argued that this coverage was excluded.
Procedural History:
Both the first and second-instance courts found the employer at fault for the worker’s death and ordered it to compensate the worker’s family based on Article 216 of the SLC.
However, regarding the insurance, both instances exonerated the insurer from paying the indemnity, reasoning that the insurance contained a general exclusion for “14. Occupational diseases and workplace accidents.”
Upon reviewing the cassation appeal, the Court upheld the employer’s liability but overturned the first-instance decision concerning the civil liability insurance, ruling that the insurer was liable for the indemnification, based on the following:
Considerations:
- Inclusion of Coverage in the Insurance:
Contrary to the lower courts' findings, the Court held that the insurance expressly included coverage for employer liability under Article 216 of the SLC. The Court stated:
“Accordingly, the legal issue consists of determining whether the lower court erred in concluding that the policy did not cover the indemnification required under Article 216 of the SLC.”
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“The insurance contract states that its effective period commenced on June 16, 2008, and ended on April 14, 2011. The policy specifies the coverages, limits, and deductibles, and provides the following conditions:
CONDITIONS. In addition to the general conditions of the policy, the insurance covers indemnities the insured must assume due to non-contractual civil liability for events including, but not limited to: (…) 4. Employer’s liability. This term encompasses all sums the insured is obligated to pay its employees pursuant to Article 216 of the Substantive Labor Code.”
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“As can be observed, the liability addressed in Article 216 of the SLC is expressly included as a covered risk.”
- Precedent on a Different Exclusion of Employer Liability:
The Court highlighted that, although in a previous decision (CSJ SL2070-2023), it had exonerated an insurer from indemnification for employer liability, in that case, the exclusion was explicitly defined and limited coverage to a specific group of diseases.
In contrast, in the case at hand, the exclusion was generic and could not be interpreted as a limitation on an expressly agreed-upon coverage for employer liability under Article 216 of the SLC.
“Nevertheless, this Chamber emphasizes that the prior exclusion was explicitly described in the policy as follows: ‘[…] does not cover disability or loss of work capacity resulting directly or indirectly, in whole or in part, from musculoskeletal disorders or mental disorders determined to have a common origin.’
In the present case, the exclusion generically refers to ‘Occupational diseases and workplace accidents.’”
- Definition of Exclusion in Insurance Policies:
The Court also reaffirmed its prior jurisprudence in ruling CSJ SC491-2023, which defined exclusions in insurance contracts. Furthermore, it emphasized that such exclusions must adhere to the principles of due diligence, transparency, and sufficient disclosure to the policyholder, in accordance with applicable regulations.
“When the cause of the harmful event or its effect does not impose liability on the insurer, such risks fall outside the agreed coverage, either because the parties have stipulated it or because a legislative provision so indicates.
These limitations on coverage constitute what are known as exclusions, whose effect, according to doctrine, ‘is to exempt the insurer from liability for a loss that, absent the exclusion, would be covered. The purpose of exclusions is not to impose an obligation on the insurer to assume risks that are expressly excluded.’”
- Exclusions Must Be Specific, Not Generic:
Accordingly, the Court concluded that the lower court made a mistake in determining that the generic exclusion for “Occupational diseases and workplace accidents” exempted the insurer from liability for indemnification.
On one hand, such a generic exclusion was insufficient to deny coverage, particularly given that the law explicitly defines occupational diseases and workplace accidents along with their consequences. On the other hand, the insurance contained specific coverage for employer liability under Article 216 of the SLC, which meant the insurer was obligated to indemnify.
“In other words, the referenced exclusion cannot be interpreted as an adequate instrument to limit the scope of an expressly insured risk, especially when the law unequivocally defines both occupational diseases and workplace accidents and details their consequences in Decree Law 1295 of 1994, Law 776 of 2002, and Law 1562 of 2012.”
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“On the contrary, full and ordinary indemnification for damages, as contemplated in the aforementioned provision, represents an additional and subsidiary framework beyond that regulatory scope. Therefore, if the parties intended to exclude this risk, they should have done so explicitly in the contract, in accordance with the jurisprudential criteria outlined above—a requirement that this Chamber does not find met and that cannot be inferred from the mere wording of the exclusions section relied upon by the lower court.”
To access ruling SL015-2025 of January 22, 2025, click here.