A recent decision by the Louisiana Supreme Court is prompting insurers and risk managers to take a closer look at how liability is shared in contractor-heavy operations. On June 27, the court ruled that Energy Transfer, formerly known as Enable Midstream Partners, was primarily responsible for a 2018 explosion that injured two workers at its natural gas processing plant in Ringgold, La.
The case involved the replacement of glycol and amine coolers at the facility, a job assigned to White Oak Radiator Service, an independent contractor. During the course of the work, an explosion occurred when residual glycol ignited while subcontracted workers were using an acetylene torch to cut piping. The injured individuals included a White Oak employee and an independent contractor hired by White Oak.
Energy Transfer attempted to shield itself from liability by invoking the state’s “manual labor exception” under Louisiana workers’ compensation law, arguing that the workers’ only recourse should be through the compensation system. The company claimed immunity from a tort suit, a common strategy when injured workers are involved in manual labor.
But the court drew a clear line: only independent contractors who have a direct contractual relationship with the principal – in this case, Energy Transfer – are covered by the manual labor exception. Because the injured parties had no such contract, they were entitled to pursue damages through a civil lawsuit.
The ruling also brought the company’s safety practices under scrutiny. Energy Transfer had issued a “hot work” permit that effectively certified the area was safe for torch use. However, the investigation revealed that not all of the glycol had been properly purged, and explosive risks remained. The court noted that key readings weren’t taken inside the glycol surge tank – the component that ultimately ruptured—and that some valves had been left open. One worker noticed a liquid pooling beneath the pipe shortly before the explosion, yet the work continued.
Initially, the trial court had assigned 90 percent of the fault to Energy Transfer and 10 percent to White Oak. The Supreme Court adjusted that to a 70-30 split, reflecting that while Energy Transfer failed to ensure the area was safe, White Oak and its subcontractors missed visible warning signs and chose to proceed with the work.
Damages awarded included compensation for cervical spine injuries and permanent hearing loss. While Energy Transfer challenged the hearing loss claim, the court upheld it, applying a presumption that the injury was caused by the incident due to the lack of prior medical issues and immediate post-incident symptoms. That presumption – often used in Louisiana injury cases – has since been legislatively repealed, making this one of the last rulings to apply it.
Although insurance policy terms weren’t directly litigated, the decision has clear implications for carriers and brokers. It emphasizes the limited reach of workers’ compensation immunity and the importance of clearly defined contractual relationships. Companies hiring independent contractors can no longer assume that all downstream workers are barred from suing simply because manual labor is involved.
For insurers, the takeaway is the need to reassess how liability is layered in contractor relationships and to advise clients on the limits of legal protections under current law. For risk managers, it’s a signal that hot work permits and safety protocols must be backed by thorough inspections and complete purging of hazardous materials.
With the court affirming the ability of subcontractor-level workers to bring tort claims, this ruling narrows protections previously relied upon by principals in contractor arrangements. It’s a development that will likely influence contract drafting, coverage planning, and claims handling across the commercial insurance landscape."
