The Alabama Supreme Court has ruled that a Zurich Insurance Group unit was not liable in an intern’s death in a steel manufacturing facility.

Zurich unit Zurich American Insurance Co. had provided a general liability policy to staffing agency Onin Staffing LLC, a division of the Birmingham, Alabama-based Onin Group Inc., that provided a $1 million per occurrence limit with an aggregate limit of $2 million, according to the ruling by Alabama Supreme Court in Nucor Steel Tuscaloosa, Inc. v. Zurich American Insurance Co. and Onin Staffing, LLC, a division of the Onion Group, Inc.

Charlotte, North Carolina-based Nucor, which operates a steel-manufacturing facility in Tuscaloosa, Alabama, had an internship program that offered part-time work to technical school students.

In August 2010, Nucor entered into a “temporary services agency agreement” with Onin to manage the employment of the technical students selected by Nucor that included an indemnification provision to indemnify it and hold it harmless from liability.

In 2014, Onin placed Korey Ryan, a community college student, in an internship program at Nucor, where he was assigned to a cutting table used to cut large plates of steel with a plasma torch.

Mr. Ryan’s work boot became caught in a gearbox, and he was dragged by a crane and crushed to death against a building support beam. There was dispute as to what Mr. Ryan was doing at the time of the accident and whether he had incorrectly stepped out of a safety area. 

Mr. Ryan’s mother filed a wrongful death action against Nucor, which was eventually settled for an undisclosed amount. 

After Zurich denied coverage in the case, Nucor filed suit against it and Odin in the case. A lower court ruled in Zurich and Onin’s favor, and was upheld by the state Supreme Court in a 4-3 ruling.

“The undisputed facts establish that Onin’s role in Ryan’s employment was strictly administrative and its facility, including the area where the accident occurred.

“Accordingly, because Onin’s role in Ryan’s employment was strictly administrative in nature while Nucor exercised completely control over all aspects of Ryan’s work, including his training and the area in which he performed his work, we find that the indemnification provision contained in the (temporary services agency agreement) is inapplicable in this case and unenforceable against Onin,” the court said, in affirming a lower court ruling.

The ruling also affirmed dismissal of other charges against Zurich, including a bad faith claim.

Four judges voted in favor of the majority opinion and three concurred in part and dissented in part.