Workers Compensation Exclusions

Excluded Injuries and Circumstances

While workers' compensation is no-fault, certain injuries are excluded from coverage:

1. Intoxication

Rule: Injuries caused by employee intoxication are typically excluded.

Important Limitations:

• Intoxication must be the proximate cause, not just a contributing factor
• Some states reduce benefits rather than eliminate them entirely
• Blood alcohol at legal intoxication level may create rebuttable presumption of proximate cause

Exception: If employer encourages or tolerates intoxication (e.g., company party with alcohol), coverage may still apply.

2. Intentional Self-Inflicted Injuries

Rule: Injuries an employee deliberately causes to themselves are excluded.

Key Points:

• Burden of proof is on the employer to prove intentional self-infliction
• Impulsive or rash acts are NOT automatically excluded
• Suicide resulting from work-related injury/stress may be covered

3. Horseplay

Rule: Injuries from horseplay (roughhousing, boisterous play, pranks) are generally excluded.

Four-Factor Test:

1. Extent and seriousness of the horseplay
2. Was horseplay commingled with job duties?
3. Has horseplay become accepted practice?
4. Does the nature of employment include some horseplay?

Critical Exceptions (Exam-Testable):

4. Willful Misconduct and Safety Violations

Rule: Injuries from willful violations of known safety rules may be excluded or result in reduced benefits.

Requirements to Exclude:

• Employee must have purposely violated a known rule
• Rule must be enforced (not just on paper)
• Burden on employer to prove willful misconduct

State Variations:

• Colorado: 50% benefit reduction (not complete denial)
• Pennsylvania: Generally covered due to strict no-fault system

5. Off-Duty and Non-Work Activities

Excluded:

• Injuries during personal errands
• Off-duty recreational activities
• Voluntary off-duty events

Exception: Employer-sponsored or required activities may be covered.

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Excluded Workers

Certain workers are excluded from coverage requirements (though they may elect coverage):

1. Independent Contractors

• Not considered employees
• Generally not covered unless they elect
• Misclassification risk: If wrongly classified, employer loses exclusive remedy protection

2. Sole Proprietors and Partners

• Excluded from coverage unless they elect to include themselves
• Not counted toward employee threshold
• Can voluntarily purchase coverage

3. LLC Members

• Not considered employees for workers' comp
• Can elect coverage voluntarily

4. Agricultural Workers (Small Farms)

• Farms with fewer than 5-10 employees (varies by state) often exempt
• Less than 6 regular or 12 seasonal employees in some states

5. Domestic Workers

• Those working <40 hours/week or <5 days/week often exempt
• Varies significantly by state

6. Corporate Officers

• May opt out in some states (especially construction with 10%+ ownership)
• Florida: Up to 3 officers with 10%+ ownership can exempt themselves