The Kentucky Supreme Court has held that a sole practitioner with no employees was not covered by his workers’ compensation policy for his injury. Kentucky Employers’ Mut. Ins. v. Ellington, 2015 WL 2340284 (Ky. May 14, 2015).

The insured operated a business as a sole practitioner and employed temporary full- or part-time workers as needed. He purchased a workers’ compensation policy which excluded him by name. He sustained an injury on a job site and made a claim, which the insurer denied based on the exclusion. The insured filed suit.

The workers’ compensation judge agreed that the owner was not covered under the policy. Responding to the argument that the policy covered no one if the exclusion was enforced, the court noted that it was sensible for the owner to maintain the policy in case he hired a new employee or bid on a job that required subcontractors to carry workers’ compensation insurance. The owner appealed. The appellate court held that the policy was ambiguous because it identified the owner as a “named insured” but also purported to exclude the owner. The court resolved this ambiguity in favor of the owner, holding that his injuries were covered. The insurer appealed.

The Kentucky Supreme Court reversed, holding that there was no ambiguity because, though his injury was excluded, the owner was still an “insured” protected from putative employees’ claims under the policy. Citing Kentucky statutory law, the Supreme Court noted that business owners are required affirmatively to elect coverage for themselves, and to pay additional premium, if they wished for their injuries to be covered under the policy. Here, the owner did not elect such coverage. It also noted that the owner repeatedly executed and received policy forms acknowledging that he was not covered and he knew that premiums varied according to the number of employees working for him during any given policy year. Accordingly, the Supreme Court concluded that he could not have reasonably expected that he would be covered for injuries he sustained on the job.