In April 2013 an explosion and fire at an ExxonMobil refinery in Beaumont injured several workers, including three employees of Brock Services, a scaffolding subcontractor.¹ Brock's contract with Exxon Mobil Corporation made Brock an independent contractor, and the three men were Brock employees who signed employment agreements with and were paid by Brock.² Exxon, however, had organized an owner-controlled insurance program that furnished workers' compensation and employer's liability coverage for Brock's workers, so the parties agree Exxon was their statutory employer under Labor Code section 406.123.³ Brock carried an umbrella policy issued by Lexington, and Exxon claimed coverage under it as an additional insured for its settlement of the three workers' tort claims, a settlement Lexington stipulated was reasonable.⁴

An arbitration panel ruled that Exxon was an additional insured under the umbrella policy and sent other determinations back to the trial court, which granted summary judgment for Exxon on the umbrella policy.¹ The Beaumont Court of Appeals reversed, holding that the employer's liability exclusion barred coverage because the Brock workers were Exxon's statutory employees; it rejected Lexington's other grounds, including its arbitration-misconduct challenges and the workers' compensation exclusion, reversed the attorney's fee and interest awards, and treated the policy-limits issue as moot.² The Court granted review and set the case for oral argument.

Petition for review from the Beaumont Court of Appeals. Oral argument: October 7, 2026.

• Exxon:¹ whether the umbrella policy's employer's liability exclusion, which turns on the meaning of "employee," bars coverage for Exxon's settlement with the three Brock employees, or whether the court of appeals wrongly imported a statutory-employer fiction and a subjective view of the exclusion's purpose into the policy's plain text.
• Lexington:² (1) whether the court of appeals properly applied the employer's liability exclusion in light of the policy's defined term "employee" rather than Exxon's construction; and (2) whether the workers' compensation exclusion also bars coverage because Exxon, as a statutory employer, provided workers' compensation coverage to the Brock workers.

The case turns on the construction of insurance-policy exclusions. Exxon says the Court since Deepwater Horizon has given policy language its plain, ordinary meaning and rejected importing extrinsic concepts, and that a reasonable construction favoring the insured controls.¹

Whether the employer's liability exclusion bars coverage.

Exxon (Petitioner): The Beaumont court relied on its subjective belief about what the exclusion is intended to address, which disrupts the predictability the Court's plain-text rules provide.¹ The statutory-employer fiction is not the only reasonable meaning of "employee": the Legislature said it applies "only for purposes of the workers' compensation laws," importing it into a private contract is flawed textual interpretation, the opinion cannot be reconciled with Maxim Crane, and swapping in a statutory definition is a backdoor incorporation of an extrinsic concept.² It adds that the ruling leaves a gap in the comprehensive coverage Texas businesses buy and gives Texans less protection than the same policy gives elsewhere.³

Lexington (Respondent): The policy defines "employee" as including "leased workers," which shows a broader meaning than Exxon's technical one, and "includes" signals an enlargement, so statutory employees like the Brock workers are covered by the term.⁴ Because Exxon provided the Brock workers' compensation coverage, they were its statutory employees, the court of appeals properly relied on the workers' compensation statute and distinguished Maxim Crane, and other jurisdictions read similar language the same way.⁵

Whether the workers' compensation exclusion independently bars coverage.

Lexington (Respondent): The exclusion for "any obligation" Exxon has under workers' compensation laws applies because, as a statutory employer, Exxon has such obligations, so the Court may alternatively affirm on that ground.⁶

Exxon (Petitioner): Both courts below rejected the workers' compensation exclusion, consistent with the Fifth Circuit's reasoning.⁷

Exxon argued that the court of appeals' reliance on a subjective view of the exclusion's purpose and on a statutory fiction creates uncertainty for a commonly used policy form and leaves Texas insureds with less coverage than they would have in other states.¹ It added that Lexington does not dispute the case's importance, because the decision leaves a gap in the tower of coverage Texas businesses buy.² Lexington argued review should be denied because the court of appeals properly read the exclusion in light of its defined terms.³

• Control. Asked what the Brock workers understood about taking orders, Exxon's counsel said actual and contractual control both matter, but the record has no evidence Brock workers were Exxon's employees. (Oral Argument, 0:15:23; 0:17:05)
• Importing a statute. Exxon's counsel said an insurer wanting a statutory concept in its policy must say so explicitly, and that looking to context should not rewrite the text. (Oral Argument, 0:18:08; 0:19:14)
• Where the policy imports it. Asked what in the policy imports the statutory employer definition, Lexington's counsel pointed to the exclusion for workers' compensation and similar laws. (Oral Argument, 0:34:11)
• Blast zone. Lexington's counsel argued that workers standing in the blast zone at Exxon's request were doing what Exxon wanted, which is enough control. (Oral Argument, 0:39:08)
• Workers' compensation money. Exxon's counsel said none of the settlement pays workers' compensation benefits, and explained two Exxon entities and 2013 uncertainty about the exclusive-remedy bar. (Oral Argument, 0:13:15; 0:14:14)
• Remedy. Asked what judgment to render if the Court agrees on the exclusion, Exxon's counsel said damages and an erosion argument remain, so remand for the court of appeals is fair. (Oral Argument, 0:48:06)
• Workers' compensation reference. Asked why Exxon's workers' compensation coverage is not essential to the policy, Exxon's counsel said to look at where the reference sits and its purpose in the text. (Oral Argument, 0:46:36)
• Athens. On the workers' compensation exclusion, Exxon's counsel said Athens answers it and Lexington has put forward no argument on that case. (Oral Argument, 0:48:52)

• Amicus curiae briefs were filed at the petition and merits stages; they are not summarized here.