Continental Casualty Company, et al. v. Theraco, Inc.

Continental Casualty Company (“CNA”) and Travelers Property Casualty Company of America (“Travelers”) filed this suit against Theraco, Inc.(“Theraco”) seeking compensation for additional workers’ compensation premiums.  Theraco’s insurance contracts with CNA and Travelers provided that it would pay premiums for employees and all other persons who posed a risk of workers’ compensation liability. Pursuant to the contracts, CNA and Travelers both charged Theraco premiums for physical therapists with whom Theraco had contracted. Theraco disputes that it is liable for paying premiums for the workers. After a hearing, the Department of Commerce and Insurance ruled that Theraco was not liable for the additional premiums because the physical therapists were independent contractors rather than employees. CNA and Travelers appealed the Department’s decision to the Chancery Court for Davidson County. The trial court upheld the Department’s ruling, not only concluding that the physical therapists were independent contractors, but also that they did not pose a risk of workers’ compensation liability. CNA and Travelers appealed to this Court. We affirm in part, reverse in part and remand for entry of a judgment consistent with this opinion.