A federal appeals court is asking the Louisiana Supreme Court to weigh in as to whether, under a state law, a QBE Insurance Group Ltd. must indemnify insureds in a case involving an electrician who was killed in a salt mine accident.

The electrician was working for Amelia, Louisiana-based MCE Electric LLC, which had a contract with Franklin, Louisiana-based Compass Minerals Louisiana Inc., according to Thursday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in QBE Syndicate 1036 v. Compass Minerals Louisiana Inc.

He was killed in 2019 when he came in contact with an energized electrical circuit while attempting to install a new circuit for a fire suppression system in a Compass salt mine on Cote Blanche Island in Louisiana.

MCE, along with Lafayette, Louisiana-based Fire & Safety Specialists Inc., had a commercial general liability policy with QBE at the time of the accident.

Compass sent a letter to QBE seeking defense, indemnity and coverage for the wrongful death suit that was filed on the basis of indemnification and additional insured provisions of the MCE and FSS purchase orders.

QBE filed a declaratory action in U.S. District Court in Lafayette, asserting that the purchase orders’ indemnification and additional insured provisions were “null, void and unenforceable” under the Louisiana Oilfield Anti-Indemnity Act, the ruling said.

The act nullifies certain contractual defense and indemnity provisions as “contrary to public policy,” the ruling said. It said the law arose out of a concern about oil companies’ unequal bargaining power that left contractors with no choice but to agree to indemnify oil companies.

QBE contended the Act applied to agreements that pertained to “drilling for minerals” and therefore applied in this case because the salt mine uses a “drill-and-blast” method for mining salt.

The U.S. District Court in Lafayette ruled against the insurer. A three-judge appeals court panel concluded there is “no clear and controlling precedent” as to whether the law covered applications beyond “just those pertaining” to a well, given that no well was involved here. 

“We conclude that certification of this question is appropriate,” a three-judge panel said, in asking the state supreme court to rule on this.

“I think the evidence is strongly in our favor,” Compass attorney Dominic J. Gianni, of Aaron & Gianni PLC in New Orleans, said. “We don’t drill wells. It’s as simple as that.” 

“The act applies to oil fields,” not salt mines, he said.

The insurer’s attorney did not respond to a request for comment.