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Present: Carrico, C.J., Compton, Stephenson, Lacy, Keenan, Koontz, JJ., and Whiting, Senior Justice

VIRGINIA ELECTRIC AND POWER COMPANY OPINION BY JUSTICE LAWRENCE L. KOONTZ, v. Record No. 951919 September 13, 1996 NORTHBROOK PROPERTY AND CASUALTY INSURANCE COMPANY FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Melvin R. Hughes, Jr., Judge In this appeal we consider whether, under a liability policy which excludes coverage for suits for bodily injury filed by "an employee" of the insured, an insurance company has an obligation to defend an insured where such a suit is brought by an individual who would be deemed a statutory employee of the insured under the Virginia Workers' Compensation Act. The essential facts of the case are not in dispute. In

October 1989, Commercial Courier Express (Commercial Courier) entered into a contract with Virginia Electric and Power Company (VEPCO) to provide designated courier services to VEPCO. contract included provisions which referenced Commercial Courier's existing general liability policy (the policy) with Northbrook Property and Casualty Insurance Company (Northbrook). As required by its contract with VEPCO, Commercial Courier submitted and Northbrook accepted an addendum to the policy adding VEPCO as an additional insured for suits arising out of courier services Commercial Courier provided to VEPCO. The The

policy included a standard "duty to defend" clause, as well as various exclusions from coverage. One such exclusion eliminated

Northbrook's liability for bodily injury to an employee of the insured for injuries "arising out of and in the course of

employment by the Insured." is the insured party.

In the context of this case, VEPCO

On March 23, 1990, Margaret C. Laveri (Laveri), a Commercial Courier employee, delivered parcels to VEPCO's office at One James River Plaza. Subsequently, in a suit filed against VEPCO,

Laveri alleged that while making the delivery she fell and was injured after stepping on a slippery substance in VEPCO's delivery area. VEPCO requested that Northbrook defend the Laveri suit under the duty to defend clause in Commercial Courier's liability policy. Northbrook denied coverage, and VEPCO proceeded to

successfully defend the Laveri suit on its own by asserting that Laveri was its statutory employee as defined by the Virginia Workers' Compensation Act. Code

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