Appeals Court Denied Insurance Coverage in Worker Death
An Illinois court ruled an employee injury exclusion bars coverage for a fatal fall at a Waukegan construction site.
Updated on Oct. 2, 2026 in Construction
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An Illinois appellate court has affirmed that an insurer is not obligated to indemnify a construction company for the 2017 death of a worker. The ruling determined that the carpenter qualified as an employee, triggering a policy exclusion that prevents coverage for the $2.65 million judgment.
Why it matters
The decision clarifies the limitations of insurance liability when companies lack workers compensation coverage. It highlights how policy exclusions can shift financial responsibility for major legal judgments onto construction firms directly.
The ruling followed a fatal fall involving a 20-foot drop at a Waukegan project. While the estate secured a $2.65 million judgment, the insurer Mt. Hawley Insurance Co. was only required to pay $250,000 toward the total.
The players
Ramiro Godinez
He was a carpenter who died following a fatal fall at a hotel construction project.
Stone Development Group Inc.
The construction company was held liable for a multi-million dollar judgment following a workplace fatality.
Mt. Hawley Insurance Co.
This insurance provider successfully argued that its policy excluded coverage for the worker involved in the incident.
Illinois Appellate Court
This judicial body is responsible for interpreting insurance contract language and state law regarding employer liability.
Occupational Safety and Health Administration
This federal agency conducts investigations into workplace accidents to ensure compliance with safety standards.
The details
The court relied on findings from an Occupational Safety and Health Administration investigation, noting that Stone Development Group had identified the victim as an employee to federal safety officials. Because the company lacked workers compensation coverage, the policy's employee injury exclusion was enforced to bar further liability for the firm.
Timeline
September 19, 2017: Ramiro Godinez fell at a construction site.
September 25, 2017: Ramiro Godinez died following the fall.
September 30, 2026: The Illinois appellate court issued its ruling.
Market Landscape
This ruling underscores the significant financial risks construction firms face when they fail to maintain mandatory insurance coverage. It highlights how courts strictly enforce policy exclusions, forcing companies to assume liability for major accidents independently.
Business owners in Illinois should ensure their insurance policies and worker classifications are fully compliant to avoid being personally liable for massive judgments. Customers should be aware that disputes over worker status can complicate the financial stability of construction projects.
The takeaway
This case serves as a warning that insurance policies will not automatically protect companies that fail to meet baseline legal requirements for worker coverage. Businesses should regularly audit their insurance documentation to ensure it matches their operational realities and safety disclosures.
Further reading
Learn more about the state's legal standards regarding Construction regulations.
Source note: This article includes information reported by Business Insurance.
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