Action Over Claims: The Hidden Risk for Tower Contractors

Most tower contractors understand workers compensation as the exclusive remedy for workplace injuries. An employee gets hurt, they file a WC claim, and the employer's liability is limited to statutory benefits. But action over claims shatter that assumption and represent one of the most financially devastating claim scenarios in the tower industry. Here is how it works. A tower technician falls and is seriously injured on a site owned by a tower company or wireless carrier. The injured worker collects workers compensation benefits from their employer. Then, the worker's attorney sues the tower owner or general contractor (a third party) for negligence, alleging unsafe site conditions, inadequate safety protocols, or defective equipment. The tower owner or GC, facing a multi-million dollar lawsuit, turns around and files a third-party claim against the employer for contractual indemnity under the MSA, alleging the employer's negligence caused the injury. This is the action over. The employer now faces liability exposure that far exceeds workers compensation limits, potentially reaching into the millions. The workers compensation exclusive remedy doctrine does not protect the employer from this third-party indemnity claim because it is being asserted by the tower owner, not the injured employee. The insurance gap is critical. Standard CGL policies contain an employer's liability exclusion (Exclusion E) that bars coverage for bodily injury to employees. When the tower owner's action over claim reaches the employer's CGL policy, the carrier may deny coverage under this exclusion, arguing that the underlying injury was to an employee. Without specific action over coverage or an amendment to Exclusion E, the employer is uninsured for this claim. The financial exposure is staggering. Action over verdicts in the tower industry routinely exceed $3M to $8M, reflecting the severity of fall injuries and the sympathetic nature of injured worker plaintiffs. These amounts dwarf typical workers compensation claim costs and can be business-ending for small to mid-size contractors. Protection requires a multi-layered approach. First, ensure your CGL policy includes action over coverage or an amendment to the employer's liability exclusion that preserves coverage for third-party-over claims. Second, carry adequate umbrella limits that also respond to action over scenarios without their own employer's liability exclusion. Third, review MSA indemnification language carefully to understand the scope of your contractual obligation to defend and indemnify the tower owner. Fourth, maintain robust safety programs that reduce the likelihood of the underlying injury occurring in the first place.