Georgia Insurers Insolvency Pool is suing Carpet Cycle and Zep for reimbursement claims related to workers’ compensation insurance insolvencies

In a recent decision by the Court of Appeals of Georgia, the court addressed three interconnected cases involving the Georgia Insurers Insolvency Pool and its right to seek reimbursement from solvent insurers under the Georgia Insurers Insolvency Pool Act. The cases involved Carpet Cycle, LLC, Zep, Inc., and temporary staffing companies North Georgia Staffing, Inc. (NGS) and Aliyah Personnel, Inc. The central issue was whether these businesses were liable for workers’ compensation claims when their staffing companies’ insurers became insolvent.

In Case No. A24A0287, Jeffrey Ward sustained an injury while working at Zep’s warehouse through NGS. After NGS’s insurer went insolvent, the Pool sought reimbursement from Zep’s insurer but was denied as Ward was not considered a borrowed servant of Zep.

Case Nos. A24A0103 and A24A0211 involved Jay Hall who was injured while working for Carpet Cycle through Aliyah. The Pool also sought reimbursement from Carpet Cycle’s insurer after Aliyah’s insurer became insolvent. The court found that Hall was a borrowed servant of Carpet Cycle at the time of his injury but remanded the case for further proceedings regarding insurance coverage responsibilities.

The court upheld that neither Zep nor Carpet Cycle had employment relationships with Ward or Hall at their respective times of injury, affirming that they were not liable under the Pool Act for reimbursement.