Finding out what insurance coverage is available for you after a motor vehicle accident can be challenging and complex. In a recent unpublished case, a Kentucky court had ruled an insurance company had no duty to defend or indemnify a man under a liability policy issued to a construction company. The construction company did highway mowing and landscaping, and its entire fleet of trucks was insured under a Tower liability policy. This policy excluded coverage for injuries that could be subject to worker’s compensation or a similar law.
An accident happened when an employee of the construction company fell from one of its pick-up trucks and died from his injuries. The truck was being operated by Brent Horn. Horn was not an employee of the company, but he had permission to operate the vehicle.
Afterward, the decedent’s estate filed a wrongful death action against Horn, who believed the liability policy for the trucks covered this type of action. He asked the insurance company to defend and indemnify him, which means paying any damages awarded by the jury. The insurer filed a complaint asking the court to decide whether it had to defend and indemnify Horn. The Court ruled that the insurance contract created coverage for Horn, however, because Horn was not an employee there was no coverage.
Both parties filed a motion for summary judgment. The court granted the insurer’s motion. It concluded that the insurance contract created coverage for Horn, but Horn was excluded because of the employee exclusion. Horn appealed, arguing that the employee exclusion did not apply to these particular facts.
The appellate court reversed the trial court and explained that where an insurance contract’s terms are plain and unambiguous, they have to be applied as written. Exclusions, like the employee exclusion, are strictly construed. The plain language of the policy covered anyone who was using with permission a covered auto. Horn would ordinarily be an insured party. The exclusion applied if the insured party could be liable as an employer or in another capacity, and it applied to an obligation to share damages or repay someone else because of an injury. Horn believed another clause applied: the “severability-of-interests” clause. This clause stated that when looking at coverage the term “insured” would only apply to the insured party claiming that coverage, not all the insured parties collectively.
In this case, the employer was the named insured party, not Horn. Horn was also an insured party, but only Horn was claiming the benefit of coverage, not the employer. Therefore, the policy was to be interpreted only with respect to Horn, not the employer. The decedent was an employee of the insured party, and therefore his death was not covered by the policy in the event of a lawsuit against the employer.
However, the Insurance Company had a duty to cover Horn’s liability to the decedent’s estate because his interests could be severed from the employer’s or the decedent’s interests. While the exclusion barred coverage for bodily injury to the insured party’s employee, Horn was being sued by someone who was not his employee. The appellate court explained that Horn had a unique status. He was not barred from coverage either in terms of defense or in terms of indemnification. It reversed the summary judgment and remanded the case to the lower court for further proceedings.
The appellate court explained that Horn had a unique status. He was not barred from coverage either in terms of defense or in terms of indemnification. It reversed the summary judgment and remanded the case to the lower court for further proceedings.
Even reading “plain and unambiguous” language in an insurance policy can be difficult for a layperson. If you are seriously hurt in a tractor trailer accident or a loved one is killed, you should consult with an attorney as soon as possible to determine whether any relief is available to you. The knowledgeable Kentucky personal injury attorneys of English, Lucas, Priest & Owsley may be able to help you. Contact us at 270-781-6500 or via our online form.