Post 5069<\/span><\/strong><\/h3>\nSee the full video at https:\/\/rumble.com\/v6t2xa1-umbrella-policy-only-effective-after-primary-policy-is-exhausted.html<\/a> \u00a0 and at https:\/\/youtu.be\/4vjjmRSdWYI<\/a><\/p>\nSexual Harassment in the Workplace is Subject to Workers\u2019 Compensation Law<\/span><\/strong><\/h3>\n![\"\"](\"https:\/\/i0.wp.com\/zalma.com\/blog\/wp-content\/uploads\/2025\/05\/sexharrass.png?resize=640%2C361\")
Rice Enterprises, LLC (\u201cRice\u201d) appealed the District Court\u2019s order dismissing its claims for insurance coverage against Zenith Insurance Company and partially dismissing its claims against RSUI Indemnity Company. Rice argued the District Court erred in applying two exclusions from the Zenith policy and in finding that coverage under RSUI\u2019s \u201cUmbrella\u201d policy had not been \u201ctriggered.\u201d<\/p>\n
In Rice Enterprises, LLC v. RSUI Indemnity Co and Zenith Insurance Company<\/em>, No. 24-1880, United States Court of Appeals, Third Circuit (April 30, 2025) affirmed the decisions of the District Court.<\/p>\nFACTS<\/span><\/strong><\/h2>\nRice operated eight McDonald\u2019s franchises in Allegheny County, Pennsylvania. On September 21, 2021, Rice\u2019s former employee, L.H., sued Rice in the Allegheny County Court of Common Pleas for negligence. L.H. alleged Rice had hired a manager who was a \u201cLifetime Offender\u201d under Megan\u2019s Law, who proceeded to sexually harass and ultimately rape L.H.<\/p>\n
Rice sought coverage with respect to L.H.\u2019s suit under three insurance policies: one issued by Zenith and two by RSUI. The Zenith policy was the \u201cEmployers\u2019 Liability\u201d half of a dual \u201cWorkers\u2019 Compensation and Employers\u2019 Liability\u201d policy, which covered liability due to \u201cbodily injury . . . aris[ing] out of and in the course of [an] injured employee\u2019s employment.\u201d RSUI\u2019s two policies were a \u201cDirectors and Officers Liability\u201d policy and a \u201cCommercial Umbrella\u201d liability policy.<\/p>\n
The Umbrella policy, the only RSUI policy provided for a defense if: a. The applicable limits of insurance of the \u201cunderlying insurance\u201d and other insurance have been used up in the payment of judgments or settlements; or b. No other valid and collectible insurance is available to the insured for damages covered by this policy.\u201d<\/p>\n
Zenith moved to dismiss all claims against it, and RSUI moved to dismiss Rice\u2019s claims only as to the Umbrella policy. The District Court granted both motions.<\/p>\n
THE DISTRICT COURT DECISIONS<\/span><\/strong><\/h2>\nAs to the Zenith policy, the District Court ruled that two exclusions applied. The first, termed \u201cC.4,\u201d excluded coverage for \u201c[a]ny obligation imposed by a workers\u2019 compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law.\u201d The District Court interpreted C.4 to bar coverage for any claim falling within the exclusive domain of Pennsylvania\u2019s Workers\u2019 Compensation Act and it determined L.H.\u2019s suit was such a claim because \u201cthe injuries and damages alleged by L.H. occurred during the course of L.H.\u2019s employment and at L.H.\u2019s Rice employment worksite.\u201d<\/p>\n
The second exclusion, \u201cC.7,\u201d barred coverage for \u201c[d]amages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions.\u201d Because all allegations in L.H.\u2019s complaint described harassing conduct by her supervisor, the District Court concluded C.7 applied.<\/p>\n
As to the RSUI Umbrella policy, the District Court determined that coverage was not \u201ctriggered\u201d because there was no allegation that other insurance had been used up or was unavailable.<\/p>\n
ZENITH POLICY<\/span><\/strong><\/h2>\nRice argued the District Court erred in applying C.7 because Rice\u2019s liability arose out of \u201csexual misconduct\u201d rather than \u201charassment.\u201d However, instances of physical contact have the potential to be among the most severe and psychologically damaging types of sexual harassment.<\/p>\n
The Third Circuit concluded that Rice\u2019s claims against Zenith were properly dismissed.<\/p>\n
RSUI Umbrella Policy<\/span><\/strong><\/h2>\nThe RSUI Umbrella policy provides for a defense if other insurance policies have been used up or are unavailable. Rice\u2019s complaint does not allege that either condition was met. The Third Circuit concluded Rice\u2019s claims under the RSUI Umbrella policy were properly dismissed.<\/p>\n
While Rice conceded that \u201cthe underlying insurance policies had not yet been exhausted,\u201d Rice nevertheless argued that the RSUI Umbrella policy should have been kept in the case for convenience which argument was summarily rejected.<\/p>\n
It continues to amaze me that lawyers will bring cases to an appellate court when faced with clear and unambiguous policy exclusions and even ask to keep an umbrella insurer as a defendant \u201cfor convenience\u201d when the underlying policy had not been exhausted. Insurance policies are contracts and must be interpreted, as did the Third Circuit, as they are written.<\/p>\n
![\"\"](\"https:\/\/i0.wp.com\/zalma.com\/blog\/wp-content\/uploads\/2024\/12\/BZTHEA.png?resize=300%2C282\")
(c) 2025 Barry Zalma & ClaimSchool, Inc.<\/p>\n
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.<\/p>\n
Subscribe to my substack at https:\/\/barryzalma.substack.com\/subscribe<\/a><\/p>\nGo to X @bzalma;\u00a0 Go to Barry Zalma videos at Rumble.com at https:\/\/rumble.com\/account\/content?type=all;<\/a> Go to Barry Zalma on YouTube- https:\/\/www.youtube.com\/channel\/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \u2013 <\/a>https:\/\/lnkd.in\/gwEYk<\/a><\/p>\n\nLike this:<\/h3>\n
Sexual Harassment in the Workplace is Subject to Workers\u2019 Compensation Law<\/span><\/strong><\/h3>\nRice Enterprises, LLC (\u201cRice\u201d) appealed the District Court\u2019s order dismissing its claims for insurance coverage against Zenith Insurance Company and partially dismissing its claims against RSUI Indemnity Company. Rice argued the District Court erred in applying two exclusions from the Zenith policy and in finding that coverage under RSUI\u2019s \u201cUmbrella\u201d policy had not been \u201ctriggered.\u201d<\/p>\n
In Rice Enterprises, LLC v. RSUI Indemnity Co and Zenith Insurance Company<\/em>, No. 24-1880, United States Court of Appeals, Third Circuit (April 30, 2025) affirmed the decisions of the District Court.<\/p>\nFACTS<\/span><\/strong><\/h2>\nRice operated eight McDonald\u2019s franchises in Allegheny County, Pennsylvania. On September 21, 2021, Rice\u2019s former employee, L.H., sued Rice in the Allegheny County Court of Common Pleas for negligence. L.H. alleged Rice had hired a manager who was a \u201cLifetime Offender\u201d under Megan\u2019s Law, who proceeded to sexually harass and ultimately rape L.H.<\/p>\n
Rice sought coverage with respect to L.H.\u2019s suit under three insurance policies: one issued by Zenith and two by RSUI. The Zenith policy was the \u201cEmployers\u2019 Liability\u201d half of a dual \u201cWorkers\u2019 Compensation and Employers\u2019 Liability\u201d policy, which covered liability due to \u201cbodily injury . . . aris[ing] out of and in the course of [an] injured employee\u2019s employment.\u201d RSUI\u2019s two policies were a \u201cDirectors and Officers Liability\u201d policy and a \u201cCommercial Umbrella\u201d liability policy.<\/p>\n
The Umbrella policy, the only RSUI policy provided for a defense if: a. The applicable limits of insurance of the \u201cunderlying insurance\u201d and other insurance have been used up in the payment of judgments or settlements; or b. No other valid and collectible insurance is available to the insured for damages covered by this policy.\u201d<\/p>\n
Zenith moved to dismiss all claims against it, and RSUI moved to dismiss Rice\u2019s claims only as to the Umbrella policy. The District Court granted both motions.<\/p>\n
THE DISTRICT COURT DECISIONS<\/span><\/strong><\/h2>\nAs to the Zenith policy, the District Court ruled that two exclusions applied. The first, termed \u201cC.4,\u201d excluded coverage for \u201c[a]ny obligation imposed by a workers\u2019 compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law.\u201d The District Court interpreted C.4 to bar coverage for any claim falling within the exclusive domain of Pennsylvania\u2019s Workers\u2019 Compensation Act and it determined L.H.\u2019s suit was such a claim because \u201cthe injuries and damages alleged by L.H. occurred during the course of L.H.\u2019s employment and at L.H.\u2019s Rice employment worksite.\u201d<\/p>\n
The second exclusion, \u201cC.7,\u201d barred coverage for \u201c[d]amages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions.\u201d Because all allegations in L.H.\u2019s complaint described harassing conduct by her supervisor, the District Court concluded C.7 applied.<\/p>\n
As to the RSUI Umbrella policy, the District Court determined that coverage was not \u201ctriggered\u201d because there was no allegation that other insurance had been used up or was unavailable.<\/p>\n
ZENITH POLICY<\/span><\/strong><\/h2>\nRice argued the District Court erred in applying C.7 because Rice\u2019s liability arose out of \u201csexual misconduct\u201d rather than \u201charassment.\u201d However, instances of physical contact have the potential to be among the most severe and psychologically damaging types of sexual harassment.<\/p>\n
The Third Circuit concluded that Rice\u2019s claims against Zenith were properly dismissed.<\/p>\n
RSUI Umbrella Policy<\/span><\/strong><\/h2>\nThe RSUI Umbrella policy provides for a defense if other insurance policies have been used up or are unavailable. Rice\u2019s complaint does not allege that either condition was met. The Third Circuit concluded Rice\u2019s claims under the RSUI Umbrella policy were properly dismissed.<\/p>\n
While Rice conceded that \u201cthe underlying insurance policies had not yet been exhausted,\u201d Rice nevertheless argued that the RSUI Umbrella policy should have been kept in the case for convenience which argument was summarily rejected.<\/p>\n
It continues to amaze me that lawyers will bring cases to an appellate court when faced with clear and unambiguous policy exclusions and even ask to keep an umbrella insurer as a defendant \u201cfor convenience\u201d when the underlying policy had not been exhausted. Insurance policies are contracts and must be interpreted, as did the Third Circuit, as they are written.<\/p>\n
(c) 2025 Barry Zalma & ClaimSchool, Inc.<\/p>\n
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.<\/p>\n
Subscribe to my substack at https:\/\/barryzalma.substack.com\/subscribe<\/a><\/p>\nGo to X @bzalma;\u00a0 Go to Barry Zalma videos at Rumble.com at https:\/\/rumble.com\/account\/content?type=all;<\/a> Go to Barry Zalma on YouTube- https:\/\/www.youtube.com\/channel\/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \u2013 <\/a>https:\/\/lnkd.in\/gwEYk<\/a><\/p>\n\nLike this:<\/h3>\n
Rice Enterprises, LLC (\u201cRice\u201d) appealed the District Court\u2019s order dismissing its claims for insurance coverage against Zenith Insurance Company and partially dismissing its claims against RSUI Indemnity Company. Rice argued the District Court erred in applying two exclusions from the Zenith policy and in finding that coverage under RSUI\u2019s \u201cUmbrella\u201d policy had not been \u201ctriggered.\u201d<\/p>\nFACTS<\/span><\/strong><\/h2>\nRice operated eight McDonald\u2019s franchises in Allegheny County, Pennsylvania. On September 21, 2021, Rice\u2019s former employee, L.H., sued Rice in the Allegheny County Court of Common Pleas for negligence. L.H. alleged Rice had hired a manager who was a \u201cLifetime Offender\u201d under Megan\u2019s Law, who proceeded to sexually harass and ultimately rape L.H.<\/p>\n
Rice sought coverage with respect to L.H.\u2019s suit under three insurance policies: one issued by Zenith and two by RSUI. The Zenith policy was the \u201cEmployers\u2019 Liability\u201d half of a dual \u201cWorkers\u2019 Compensation and Employers\u2019 Liability\u201d policy, which covered liability due to \u201cbodily injury . . . aris[ing] out of and in the course of [an] injured employee\u2019s employment.\u201d RSUI\u2019s two policies were a \u201cDirectors and Officers Liability\u201d policy and a \u201cCommercial Umbrella\u201d liability policy.<\/p>\n
The Umbrella policy, the only RSUI policy provided for a defense if: a. The applicable limits of insurance of the \u201cunderlying insurance\u201d and other insurance have been used up in the payment of judgments or settlements; or b. No other valid and collectible insurance is available to the insured for damages covered by this policy.\u201d<\/p>\n
Zenith moved to dismiss all claims against it, and RSUI moved to dismiss Rice\u2019s claims only as to the Umbrella policy. The District Court granted both motions.<\/p>\n
THE DISTRICT COURT DECISIONS<\/span><\/strong><\/h2>\nAs to the Zenith policy, the District Court ruled that two exclusions applied. The first, termed \u201cC.4,\u201d excluded coverage for \u201c[a]ny obligation imposed by a workers\u2019 compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law.\u201d The District Court interpreted C.4 to bar coverage for any claim falling within the exclusive domain of Pennsylvania\u2019s Workers\u2019 Compensation Act and it determined L.H.\u2019s suit was such a claim because \u201cthe injuries and damages alleged by L.H. occurred during the course of L.H.\u2019s employment and at L.H.\u2019s Rice employment worksite.\u201d<\/p>\n
The second exclusion, \u201cC.7,\u201d barred coverage for \u201c[d]amages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions.\u201d Because all allegations in L.H.\u2019s complaint described harassing conduct by her supervisor, the District Court concluded C.7 applied.<\/p>\n
As to the RSUI Umbrella policy, the District Court determined that coverage was not \u201ctriggered\u201d because there was no allegation that other insurance had been used up or was unavailable.<\/p>\n
ZENITH POLICY<\/span><\/strong><\/h2>\nRice argued the District Court erred in applying C.7 because Rice\u2019s liability arose out of \u201csexual misconduct\u201d rather than \u201charassment.\u201d However, instances of physical contact have the potential to be among the most severe and psychologically damaging types of sexual harassment.<\/p>\n
The Third Circuit concluded that Rice\u2019s claims against Zenith were properly dismissed.<\/p>\n
RSUI Umbrella Policy<\/span><\/strong><\/h2>\nThe RSUI Umbrella policy provides for a defense if other insurance policies have been used up or are unavailable. Rice\u2019s complaint does not allege that either condition was met. The Third Circuit concluded Rice\u2019s claims under the RSUI Umbrella policy were properly dismissed.<\/p>\n
While Rice conceded that \u201cthe underlying insurance policies had not yet been exhausted,\u201d Rice nevertheless argued that the RSUI Umbrella policy should have been kept in the case for convenience which argument was summarily rejected.<\/p>\n
It continues to amaze me that lawyers will bring cases to an appellate court when faced with clear and unambiguous policy exclusions and even ask to keep an umbrella insurer as a defendant \u201cfor convenience\u201d when the underlying policy had not been exhausted. Insurance policies are contracts and must be interpreted, as did the Third Circuit, as they are written.<\/p>\n
(c) 2025 Barry Zalma & ClaimSchool, Inc.<\/p>\n
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.<\/p>\n
Subscribe to my substack at https:\/\/barryzalma.substack.com\/subscribe<\/a><\/p>\nGo to X @bzalma;\u00a0 Go to Barry Zalma videos at Rumble.com at https:\/\/rumble.com\/account\/content?type=all;<\/a> Go to Barry Zalma on YouTube- https:\/\/www.youtube.com\/channel\/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \u2013 <\/a>https:\/\/lnkd.in\/gwEYk<\/a><\/p>\n\nLike this:<\/h3>\n
As to the Zenith policy, the District Court ruled that two exclusions applied. The first, termed \u201cC.4,\u201d excluded coverage for \u201c[a]ny obligation imposed by a workers\u2019 compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law.\u201d The District Court interpreted C.4 to bar coverage for any claim falling within the exclusive domain of Pennsylvania\u2019s Workers\u2019 Compensation Act and it determined L.H.\u2019s suit was such a claim because \u201cthe injuries and damages alleged by L.H. occurred during the course of L.H.\u2019s employment and at L.H.\u2019s Rice employment worksite.\u201d<\/p>\n
The second exclusion, \u201cC.7,\u201d barred coverage for \u201c[d]amages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions.\u201d Because all allegations in L.H.\u2019s complaint described harassing conduct by her supervisor, the District Court concluded C.7 applied.<\/p>\n
As to the RSUI Umbrella policy, the District Court determined that coverage was not \u201ctriggered\u201d because there was no allegation that other insurance had been used up or was unavailable.<\/p>\n
ZENITH POLICY<\/span><\/strong><\/h2>\nRice argued the District Court erred in applying C.7 because Rice\u2019s liability arose out of \u201csexual misconduct\u201d rather than \u201charassment.\u201d However, instances of physical contact have the potential to be among the most severe and psychologically damaging types of sexual harassment.<\/p>\n
The Third Circuit concluded that Rice\u2019s claims against Zenith were properly dismissed.<\/p>\n
RSUI Umbrella Policy<\/span><\/strong><\/h2>\nThe RSUI Umbrella policy provides for a defense if other insurance policies have been used up or are unavailable. Rice\u2019s complaint does not allege that either condition was met. The Third Circuit concluded Rice\u2019s claims under the RSUI Umbrella policy were properly dismissed.<\/p>\n
While Rice conceded that \u201cthe underlying insurance policies had not yet been exhausted,\u201d Rice nevertheless argued that the RSUI Umbrella policy should have been kept in the case for convenience which argument was summarily rejected.<\/p>\n
It continues to amaze me that lawyers will bring cases to an appellate court when faced with clear and unambiguous policy exclusions and even ask to keep an umbrella insurer as a defendant \u201cfor convenience\u201d when the underlying policy had not been exhausted. Insurance policies are contracts and must be interpreted, as did the Third Circuit, as they are written.<\/p>\n
(c) 2025 Barry Zalma & ClaimSchool, Inc.<\/p>\n
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.<\/p>\n
Subscribe to my substack at https:\/\/barryzalma.substack.com\/subscribe<\/a><\/p>\nGo to X @bzalma;\u00a0 Go to Barry Zalma videos at Rumble.com at https:\/\/rumble.com\/account\/content?type=all;<\/a> Go to Barry Zalma on YouTube- https:\/\/www.youtube.com\/channel\/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \u2013 <\/a>https:\/\/lnkd.in\/gwEYk<\/a><\/p>\n\nLike this:<\/h3>\n
The RSUI Umbrella policy provides for a defense if other insurance policies have been used up or are unavailable. Rice\u2019s complaint does not allege that either condition was met. The Third Circuit concluded Rice\u2019s claims under the RSUI Umbrella policy were properly dismissed.<\/p>\n
While Rice conceded that \u201cthe underlying insurance policies had not yet been exhausted,\u201d Rice nevertheless argued that the RSUI Umbrella policy should have been kept in the case for convenience which argument was summarily rejected.<\/p>\n
It continues to amaze me that lawyers will bring cases to an appellate court when faced with clear and unambiguous policy exclusions and even ask to keep an umbrella insurer as a defendant \u201cfor convenience\u201d when the underlying policy had not been exhausted. Insurance policies are contracts and must be interpreted, as did the Third Circuit, as they are written.<\/p>\n
(c) 2025 Barry Zalma & ClaimSchool, Inc.<\/p>\n
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.<\/p>\n
Subscribe to my substack at https:\/\/barryzalma.substack.com\/subscribe<\/a><\/p>\n Go to X @bzalma;\u00a0 Go to Barry Zalma videos at Rumble.com at https:\/\/rumble.com\/account\/content?type=all;<\/a> Go to Barry Zalma on YouTube- https:\/\/www.youtube.com\/channel\/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \u2013 <\/a>https:\/\/lnkd.in\/gwEYk<\/a><\/p>\nLike this:<\/h3>\n