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The McLaughlin Company employees are all members of CWA 2336, AFL-CIO
JATC Program
Apprenticeship Funds: Insurance Problems and Solutions
There is good news. Job training is at an all time high and Unions are leading the way. This is good for unions, good for an economy that depends on a well trained work force, good for employers and good for the workers....but there is a problem.
The Problem
Many Funds are without insurance coverage.
Those that have insurance may have insurance programs with gaps or duplications in coverage.
Insurance is being provided by a number of different insurance companies through a diverse agency force.
Multiple insureds in a single claim require coordination of defense.
What coverages are needed?
- Commercial General Liability
- Association Liability
- Professional Liability
- Publishers Liability
- Employment Practices Liability Insurance
- Fiduciary Liability
- Participant Accident Coverage
How many of those policies do you have? Under the policies you have, do you know how the Insuring Agreements and Definitions of Wrongful Act would respond to liability suits against your Training Fund? Who is insured under your policies? Is there coverage for Contingent Bodily Injury and Property Damage?
Contingent bodily injury and property damage.
Many Commercial General Liability Policies contain specific exclusions for activities such as instruction, architectural/design services and medical/nursing or construction exposures. Accordingly, professional liability coverage is needed for these exposures. The coverage must respond to contingent bodily injury and property damage claims including claims growing out of certification and standard setting. We know many Unions are actively involved in creating certification programs for everything from welding to riveting. Where is the insurance coverage for the contingent bodily injury and property damage liability arising from these certification programs? The typical educational or training institution actively engages in disseminating information by printed or oral means. Coverage for these perils is typically afforded by publishers’ liability policies. This coverage must also respond to contingent bodily injury and property damage claims.
Consider this scenario: A training fund approves an improper teaching technique and curriculum. Training instructors use this curriculum to train 40,000 students in proper techniques for asbestos and lead abatement in a facility operated by an international union in conjunction with a training fund. The same group provides training of workers in the metal trades on Department of Energy cleanup projects.
Subsequently, work is performed improperly by the apprentices resulting in injury to the apprentices, as well as damage to the property of third parties. Suits are brought by the apprentices, their families, employers, the third parties as well the Federal Government. Who will be sued? Where is the coverage? Would policies cover bodily injury and property damage liability arising from published material, curriculum or training? While this illustration involves a large program with many different entities involved, it is easy to imagine a similar circumstance on a smaller scale.
Employment related suits
Training committees act as the employer for many individuals. All committees have a training director or coordinator. Instructors are routinely hired to train the apprentices and provide journeymen upgrade instruction. Committees routinely hire clerical and support staff. Apprentices can be deemed "employees" of the training committee for many purposes such as selection, job assignment and discipline.
In the case of Roofing, Metal and Associates, Inc., 304 NLRB No. 30 [139 LRRM 1246](1991), an apprenticeship training trust committee and the employer association were found to have violated the National Labor Relations Act. Both the Committee and the Employer Association complied with the union business manager’s request to discharge the apprenticeship committee’s trainer. This trainer had recently announced his candidacy for the position of business manager of the local union. At the incumbent business manager’s request, the committee fired the trainer for reasons unrelated to his performance on the job as a trainer of apprentices.
Employment Related Practices Exclusion, which is frequently attached to the Commercial General Liability Policy, will exclude these types of suits whether the fund is liable as an employer or in any other capacity. While it is possible to obtain some employment related practices coverage under the fiduciary liability policy, this is limited in terms of the insureds (apprentices are not covered) and the scope (often restricted to defense costs.)
Federal laws
Many different laws regulate how a JATC selection committee may interview, test and select candidates. Below is a partial listing of the federal legislation governing this process. There are similar state laws which may impose slightly different obligations:
- Title VII of the 1964 Civil Rights Act
- Pregnancy Discrimination Act
- Family and Medical Leave Act
- Age Discrimination in Employment Act
- Americans with Disabilities Act
- Workers Compensation
Apprenticeship committees often face the question of who is responsible for Workers Compensation coverage for the apprentice. Generally speaking, the committee will not be held to be the employer for purposes of workers’ compensation coverage. However, sometimes if the apprentice is not employed but is attending school under an arrangement between a local public school and the committee, the school will be deemed responsible for providing workers compensation insurance. Most times, however, the employer will provide the coverage if the apprentice is employed at the time of the on-the-job or classroom instruction.
Pollution liability
There is nearly a complete exclusion of coverage for liability arising out of pollution regardless of whether the liability rises from a tort, a contract or a statute. In addition, pollution exclusion states that coverage does not apply to costs arising out of any "request, demand or order" that the insured test, monitor or clean up pollution. The major concern is the tremendous costs of cleaning up pollution. In a major clean up, anyone connected with a site will be sued.
With Unions involved at so many levels, is there a simple but comprehensive way to address the liability exposures generated by the Training Activity? Unfortunately, there is not. There can be no "cookie cutter" solution. This is not a "one size fits all" problem. But with proper attention to detail and some negotiating skill it is possible to put together a program that will respond to the paramount liability exposures faced by the funds and their sponsors
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