Shot Employee Gets No Workers’ Comp and No Employer’s Liability

He was not covered by workers’ compensation insurance. But he was in the course and scope of employment enough for an employer’s liability insurance exclusion to apply, said the U.S. 11^th Circuit Court of Appeals, which overturned a lower federal court ruling and left a left-for-dead convenience store employee with no recompense from the store’s insurance carrier.

The appellate court found in favor of State Farm Fire and Casualty Co., noting that the employer’s liability policy clearly excluded coverage for criminal acts or for injuries arising “out of and in the course of … employment.” The decision negated a lower court’s $1.3 million judgment against State Farm.

The shooting took place at the Pit Stop Grocery in Birmingham, Alabama, in 2016. The clerk, Amanali Babwari, closed the convenience store about 11 p.m. that night. As he walked to his car in the parking lot, a robber shot him nine times, took the store’s money bag, and disappeared. The worker survived but was severely injured.

Under Alabama law, employers with fewer than five employees are not required to secure workers’ compensation coverage. Only Alabama, Mississippi and Tennessee allow coverage exemptions for firms with that many workers, according to the Workers’ Compensation Research Institute.

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The 11^th Circuit pointed out that State Farm’s employer’s liability exclusion wording is very similar to Alabama’s workers’ comp statute, which states that comp insurance covers injuries arising out of and in the course of employment, including incidents in the parking lot immediately after the work shift.

“This similarity is no coincidence,” the 11^th Circuit’s three-judge panel wrote in its per-curiam decision. “Pit Stop’s insurance policy unambiguously transplants the meaning of ‘arising of out and in the course of … employment’ from the workers’ compensation statute.”

And even if Babwari’s employer had secured workers’ comp insurance, his attorneys argued that the clerk was not exactly at work at the time, an assertion that could have negated the policy exclusion and produced an employer’s liability insurance payout, explained the clerk’s lead attorney, David Lee Bruce, of Birmingham.

The appellate judges noted that case law has established that an employer’s general liability policy, though, is designed to provide coverage only for a firm’s liability to the general public, not for injuries to employees.

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The convenience store owner and Babwari after the incident had settled for $877,659 and had obtained a state court’s consent judgment for that amount. But perhaps because the small store had few resources, the clerk brought a suit against State Farm under Alabama’s direct-action statute.

State Farm moved the case to federal court. The U.S. District Court for Northern Alabama in 2023 found in Babwari’s favor, ordering State Farm to pay the settlement amount plus some $262,000 in pre-judgment interest. The judge found that Babwari’s injuries counted as an “occurrence” covered under the policy and ruled that no exclusion barred coverage.

But after the appeal by State Farm, the 11^th Circuit panel reversed the decision and remanded the case to the district court to enter summary judgment in the insurer’s favor.

The lead attorney for State Farm in the appeal declined to comment. The 10-page opinion can be seen here.