Pick-Up Trucks, Work-Related Injuries and Carpools

Your insured is hauling his personal property in the bed of a pickup truck and it falls or bounces out. His ISO HO-3 policy covers personal property on a named perils basis, and one of those perils consists of one word: Vehicles. However, the adjuster has denied the claim, providing the following reasoning:

“The ‘vehicle’ wording is vague, and we have ‘guidelines’ for claims in this state and say there must be an impact (wreck or whatever). We used to be very liberal in the interpretation of ‘vehicle’ damage, but then studied what other companies were doing and paying, and set ‘guidelines’ that are more limited than before.”

First of all, the adjuster says that the wording is vague. Without citing several thousand court cases, it is an established doctrine in insurance policy interpretation that, when a word or term has more than one reasonable meaning, the one favoring the insured carries the most weight.

Second, the insurer has a “guideline” for coverage that interprets the “vehicle” peril to require an impact. Funny, the contract doesn’t mention that. If the intent or effect of the peril is that a wreck is a prerequisite for coverage, then the policy should state that or the carrier should be ready to cite case law supporting that interpretation.

Third, the insurer has studied what other companies were doing and paying. Since when do contractual obligations between two parties (insurer and insured) hinge on the actions or contracts of other parties?

For the full article, click here.

In general, the CGL policy excludes claims that arise out of employment related injuries. Those claims are generally best covered by workers’ compensation and employers’ liability coverages. However, a fairly common type of claim arises out of third-party-over actions and coverage—under CGL, WC and/or EL policies—can depend on several factors.

For example, a warehouse employee entered a restricted area where a pallet-making machine was housed. He was severely injured by the machine and collected workers comp benefits; then he filed a product liability suit against the machine manufacturer and collected almost $1 million. The manufacturer sued the warehouse employer in a third-party-over action, citing an indemnity agreement and negligent supervision. In other words, the suit was based on both contractual liability and tort liability.

The question is what, if any, insurance policy responds to such third-party-over actions? The answer is: It depends. First of all, the workers’ compensation policy usually responds by paying statutory benefits—it does not cover liability claims. That leaves two possibilities: the CGL policy or the employers liability coverage (provided by the workers comp policy or a stop-gap policy/endorsement).

Coverage may depend on whether the suit is filed on the basis of tort or contract, so that either or both policies could respond. For the full article, click here.

With gasoline prices soaring and roadways becoming more and more congested, it can be expected that carpooling will become increasingly popular, if not necessary, in many areas.

Depending on the edition, the PAP usually excludes transporting persons or property for a fee or using a vehicle as a public or livery conveyance. However, an exception is made for a share-the-expense car pool. So, at issue is: What constitutes “sharing expenses” in a car pool arrangement?

Also, if a passenger fairly regularly drives a car pool vehicle owned by someone else, does that trigger the “furnished or available for your regular use” exclusion in their PAP?

As you can see, what appears to be covered on the surface for an increasingly common exposure may be more complicated when you think about the unique circumstances of each situation. So, advising a client that, “Yeah, carpooling is covered,” could be a fatal mistake. For the full article, click here.