In the world of commercial insurance, few things cause more confusion—or more surprise legal bills—than action over claims. If you're a contractor or subcontractor, it’s crucial to understand what these are and how they can seriously impact your business. 
What Is an "Action Over" Claim?
Here’s a simple example: one of your employees gets injured on the job. Normally, workers' compensation kicks in and covers their medical bills and lost wages. Because of workers' comp laws, the employee usually can’t sue you directly.
But what if the injured worker sues someone else—like the general contractor, property owner, or the client you're working for—claiming they were partly to blame for the injury? That’s called an action over lawsuit.
And here’s where it gets tricky: even though the worker is suing a third party, that party can turn around and sue you—their subcontractor—for reimbursement. This often happens because of language in your contract that says you’ll cover injuries to your own workers.
Why This Matters to You
If you're a subcontractor, you’ve probably signed contracts with general contractors or property owners. Many of those contracts include indemnity clauses, which means if your employee sues them, you have to pay for their legal costs and any damages.
So even if you did everything right and workers’ comp handled the injury, you can still end up footing the bill for a lawsuit that you weren’t even directly involved in. This can be devastating—especially for small and mid-sized businesses.
What About My Insurance?
Good question. Most commercial general liability (CGL) policies exclude coverage for action over claims. That means if you’re sued in one of these situations, your insurance might not cover you at all. You could be left paying for legal defense and damages out of your own pocket.
Are There Any Insurance Options?
Sometimes, insurance companies offer an "Action Over Exclusion Buyback." This means they’ll remove that exclusion from your policy—for an added cost. But these buybacks are rare, especially for smaller contractors, and they often come with strict conditions and higher premiums.
There are also standalone (monoline) policies that cover action over claims. These are specialized, hard to find, expensive, and not always a good fit for most businesses.
The Best Protection: Prevent Problems Before They Start
The smartest way to protect your business is through prevention. Before signing any contract, make sure you understand what you're agreeing to—especially the indemnity and insurance sections. Have a legal expert review it. Don’t assume your insurance policy automatically covers everything on the jobsite.
At Bone, Robertson & McBride Inc., we help contractors avoid these traps before they turn into costly legal messes. Let us review your contracts and insurance program so you’re not left exposed.
Contact Aimee Padden at (925) 674-1000 ext. 107 or email info@brmins.com to schedule a consultation.
This blog is for general informational purposes only and should not be considered legal advice.