Pollution Exclusions, PAP Nonowners, CGL for Truckers

A contractor was hauling an oil tank on his flatbed trailer to a disposal site. The tank leaked a small amount of oil onto the road and a motorcycle in back of the truck slid on the oil, injuring the driver. The insurance carrier denied the loss based on the pollution exclusion. Do you agree? The Big “I” Virtual University does not.

Needless to say, VU faculty could discuss the ISO business auto policy (or CGL) pollution exclusion to the extent that they would fill the pages of this magazine. However, focus on the very specific wording of the exclusion; it is too often overlooked in the zeal to find yet another creative way to use this exclusion to deny a claim.

The BAP defines “pollutants” as follows:

The exclusion applies to BI or PD “arising out of” a “pollutant.”

In the subject claim, the BI or PD did not “arise out of” the pollutant within the context of it being an irritant or contaminant. This is the equivalent of a slip and fall and the coverage denial is a woeful distortion of the intent of the exclusion. This claim denial is reminiscent of one (later reversed) where a lady slipped in a puddle of bleach that had spilled from a damaged bottle that had fallen off a grocery store shelf.

In other words, in order for the pollution exclusion to apply in either the auto or CGL policy, the BI or PD must arise out of injury or damage resulting from irritation or contamination, not merely from a slip and fall.

For the full article, click here.

Consumers who don’t own autos can insure their exposure while using nonowned vehicles by purchasing a Personal Auto Policy (PAP) with the Named Nonowner endorsement attached. The most notable missing coverage, though, is physical damage. Recently, the question was raised as to whether this endorsement, like the PAP, automatically extends physical damage coverage for a limited period to acquired autos.

This issue was run by the VU faculty and their responses were numerous and voluminous. If you want to witness an insurance nerd free-for-all that would put the TV show Survivor to shame, read the VU faculty debate on this issue here.

Several “Ask an Expert” questions have come in about the need for CGL coverage for someone whose business involves almost exclusively the driving or operation of a motor vehicle, from long-haul truckers to cement truck drivers to parcel delivery services. Do such businesses really need CGL coverage?

Generally speaking, virtually anyone engaged in an activity involving the public needs general liability insurance. Just because the greatest exposure might (or might appear to) be the operation of a vehicle, that doesn’t mean that significant non-auto exposures don’t exist.

For example, if we’re talking about a trucker or someone else whose living largely involves the transportation of goods, does he ever unload the truck? If so, is he aware that his auto policy most likely excludes completed operations? If not, could he be held liable for injury or damage arriving from a delivery in other ways?

Does he ever go onto the premises of others for business purposes? Does anyone ever come onto his premises for business, even if he operates out of his home? Is it possible that he could be sued for libel, slander, invasion of privacy, advertising or copyright infringement?

For the full article, click here.

Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University, an online learning center for agents and brokers. Follow the Virtual University on Twitter at Twitter.com/BigIVU.