Kinsale Insurance is seeking a ruling from a federal judge to determine whether it must provide coverage for a workplace injury claim stemming from a serious accident at an oil site in New Mexico. The lawsuit involves a contractor who was severely burned during a generator explosion on August 18, 2025.
The incident occurred in October 2021, when Juan Carlos Gamboa Leyva was working for Trucking & Contracting Services, LLC (TCS) at an oil site in Carlsbad, New Mexico. Gamboa was inspecting a generator when it exploded, resulting in significant burns on his arm. He claims that TCS did not file a workers’ compensation claim on his behalf or report the incident to federal safety authorities.
In April 2024, Gamboa filed a lawsuit against both TCS and Mewbourne Oil Company, but later dropped his claims against Mewbourne, leaving TCS as the sole defendant. He is seeking damages for pain, medical expenses, lost wages, and other related costs.
Kinsale Insurance, which has policies with TCS, filed a complaint in the U.S. District Court for the District of New Mexico. The insurer argues that its policies—a combined environmental liability policy and an excess liability policy—do not cover the accident. Kinsale cites two main exclusions: one for employer’s liability, which denies coverage for employee injuries during work, and another for independent contractors, which applies unless specific insurance and documentation requirements are met. Kinsale claims that Gamboa did not fulfill these requirements, as he did not have his own insurance, did not add TCS as an additional insured, and did not sign a hold harmless agreement.
The situation is further complicated by a dispute over Gamboa’s employment status. TCS’s owner asserts that Gamboa was an independent contractor running his own pressure washing business. However, Gamboa insists he was an hourly employee who received daily assignments from TCS. This raises questions about liability and coverage that are often seen in similar cases.
Kinsale maintains that regardless of Gamboa’s employment status, the policy exclusions indicate there is no coverage for his injuries. The insurer also points out that its policies exclude any obligations under workers’ compensation laws, meaning they have no duty to defend TCS if there is no coverage.
As the case progresses, it remains to be seen how the court will rule. No judge has yet made a decision, and TCS and Gamboa will have the opportunity to respond to Kinsale’s claims. The outcome could have significant implications for how liability exclusions are applied in the insurance industry, particularly in high-risk sectors like oil and gas. Industry professionals are closely monitoring the situation, as it may influence future contractor-insurer relationships and risk management strategies.