The federal district court granted the insurer’s motion for summary judgment finding there was no coverage for an employee’s injury due to the policy’s Workers’ Compensation exclusion. Houston Spec. Ins. Co. v. Villanueva, 2025 U.S. Dist. LEXIS 255989 (E.D. Wash. Dec. 10, 2025).

Heavy Metal Carports Inc. (HMC) secured a policy from Houston Specialty Insurance Company which included a Workers’ Compensation exclusion.

Villanueva was an employee of an independent contractor performing work for HMC. HMC did not obtain an indemnity agreement, proof of workers’ compensation coverage, or proof of any other insurance from the independent contractor. Villanueva was injured at work and sued HMC. The lawsuit was resolved with a stipulation to enter a judgment against HMC in the amount of $4.95 million and an assignment of HMC’s claims against Houston, if any, to Villanueva. Houston then filed this suit seeking Declaratory Relief that it had no duty to defend or indemnify.

The exclusion stated the insurance did not apply to “[a]ny obligation of the insured under a workers’ compensation, disability benefits or unemployment compensation law or any similar law.”

Houston moved for summary judgment.arguing the Workers’ Compensation exclusion barred indemnity coverge since HMC and the independent contractor failed to obtain workers’ compensation as required by state law, and the obligation of HMC to Villanueva pursuant to the stipulated judgment was inherently related to the workers’ compensation law.

The court granted Houston’s motion for summary judgment. In Washington, a workers’ compensation exclusion barred an insurer’s liability to indemnify the insured when the insured failed to obtain workers’ compensation coverage prior to the injury of an employee. It was irrelevant what the specific causes of action in the underlying suit were, whether it was negligence or a specific claim under a workers’ compensation law, so long as an individual who typically would be covered by workers’ compensation was injured and the employer failed to obtain workers’ compensation coverage.

HMC and the independent contractor’s failed to obtain workers’ compensation coverage as required by state law. Accordingly, the Workers’ Compensation exclusion barred claims under workers’ compensation laws and similar laws. The underlying suit was sufficiently related to workers’ compensation to be barred under the policy’s Workers’ Compensation exclusion Therefore, Houston’s motion for summary judgment was granted.