Nautilus Insurance is asking a federal court to rule it doesn’t have to defend or pay out for a contractor in a $1 million construction injury lawsuit, citing a worker exclusion.
On July 29, 2025, Nautilus Insurance Company filed a complaint in the United States District Court for the Northern District of Illinois. The insurer wants a judge to declare it has no duty to defend or indemnify Seibert Group 1, LLC - better known as SG Home Builders - in a personal injury case now pending in Cook County, Illinois. At the heart of the dispute is a common but often-contested clause in commercial general liability policies: the “Injury to Workers Exclusion.”
Here’s what’s in play. John Kearns, a concrete delivery driver for Welsh Ready Mix, filed a lawsuit on March 25, 2025, claiming he was injured on June 13, 2023, at a residential construction site in Downers Grove, Illinois. Kearns alleges he stepped into a hidden hazard while delivering concrete to the jobsite, which was managed by SG Home Builders. He’s suing SG and several other contractors for negligence and premises liability, seeking damages in excess of $75,000.
SG Home Builders, the general contractor on the project, held a commercial general liability policy with Nautilus. The policy, number PN1241450, was in effect from September 1, 2022, to September 1, 2023, and provided liability limits of $1 million per occurrence and $2 million in the aggregate. After Kearns sued, SG Home Builders asked Nautilus to cover the claim and provide a defense.
Nautilus, however, says it shouldn’t have to. The insurer’s complaint points to the “Injury to Workers Exclusion,” added to the policy by endorsement (Form L205 (11/10)). This exclusion bars coverage for bodily injury to employees, contractors, subcontractors, or independent contractors of any insured - or of the insured’s contractors or subcontractors - if the injury arises out of and in the course of employment or while performing duties related to the insured’s business.
The complaint quotes the exclusion: coverage does not apply to “‘bodily injury’ to: (1) ‘Employees’, ‘leased workers’, ‘temporary workers’, ‘volunteer workers’, statutory ‘employees’, casual workers, seasonal workers, contractors, subcontractors, or independent contractors of any insured; or (2) Any insured’s contractors’, subcontractors’, or independent contractors’ ‘employees’… arising out of and in the course of: (a) Employment by any insured; or (b) Directly or indirectly performing duties related to the conduct of any insured’s business.”
Nautilus claims that, at the time of the alleged injury, Kearns was working as a subcontractor of SG’s contractor, performing duties within the scope of his employment with Welsh Ready Mix. Because of this, Nautilus argues, the exclusion applies and the company has no duty to defend or indemnify SG Home Builders in the underlying lawsuit. The insurer is asking the court to declare that the exclusion precludes coverage and that Nautilus is not responsible for any judgment or settlement in the case.
It’s important to note that this is just the insurer’s position, not a final ruling. The court will have to decide whether the exclusion applies based on the facts and the policy language. For now, the case is at the complaint stage, and the outcome is still to be determined.
For insurance professionals, especially those working with construction clients, this case is a clear reminder of how critical policy language can be. Worker exclusions are a staple in general liability policies, but when a claim is filed, the details - who was injured, what they were doing, and who they worked for - can make all the difference.
The result of this lawsuit could shape how insurers draft and enforce worker exclusions and influence how contractors and brokers manage risk on the jobsite. For now, it’s a dispute worth watching for anyone in the business of insuring construction projects.
