Contractor who lost license cannot sue for lost compensation: Court
- October 15, 2025
- Posted by: Web workers
- Category: Workers Comp
A construction contractor’s license revocation over a failure to maintain a workers compensation insurance policy was proper and prevented it from suing a general contractor on a project, the California Court of Appeal ruled Tuesday.
American Building Innovation LP initially had a workers comp policy, but it was canceled because the company refused to pay outstanding premiums on a prior policy, leading to license revocation, the ruling states.
American Building, which continued operating after license revocation, sued general contractor Balfour Beatty Construction LLC for outstanding compensation it claimed to be owed.
American Building subsequently settled its premium dispute with the insurer, and its policy was retroactively reinstated, the ruling states.
The company applied for retroactive reinstatement of its contractor’s license, claiming that its failure to file a certificate of workers comp coverage was due to circumstances beyond its control.
The appeals court determined state law bars American Building from suing over lost compensation because the company actively chose not to pay billed insurance premiums.
“ABI learned of the policy cancellation days after it took effect, yet ABI did not procure replacement coverage until years later when it settled the premium dispute with its insurer,” the ruling states. “The insurer’s retroactive reinstatement of the policy following that settlement was essentially meaningless because it occurred long after the statute of limitations ran on any workers’ compensation claims, rendering the coverage illusory.”
The court also upheld $1.55 million in attorneys fees that had been awarded to the defendant.
