"Travelers Needn’t Defend Co. In Suit Over Crash In Exec's Car," Law360

02.13.2019

David Atkinson HeadshotIn a Law360 article published on Feb. 12, 2019, partner David Atkinson was mentioned for his successful representation of two Travelers Insurance entities. U.S. District Court Judge William M. Ray, II, granted summary judgment to the insurance companies, finding no duty to defend or indemnify under commercial insurance policies.

The underlying claims arose out of a single-vehicle accident that resulted in injuries to the driver and passenger. The vehicle, which was owned by a shareholder and executive of the insured companies, was “wrapped” with the logo of one of the insured companies. At the time of the accident, an employee of one of the insured companies was using the vehicle on a personal errand to take her boyfriend to his job.

The Travelers policies provided limited coverage for automobile accidents if the vehicle involved was a “hired auto” or a “nonowned auto” as defined in the policies. In his ruling, Judge Ray found the vehicle did not qualify as a “hired auto” or a “nonowned auto.” According to the order, the vehicle is not a “hired auto” because it was not leased, rented or borrowed by the corporate defendants and, even if it were, the vehicle was owned by the companies’ shareholder and executive, which excluded it from being a “hired auto.” Further, the court held the vehicle is not a “nonowned auto” because it was not being used in the course and scope of the insured-companies’ business at the time of the accident. The court noted that, although there were allegations in the underlying tort suit that the vehicle was being used on behalf of the insured-companies to promote their business at the time of the accident, the undisputed facts demonstrated that the vehicle was not being used in the course and scope of the companies’ business at the time of the accident. According to the court, “coverage does not depend on ‘how artfully a claim is drafted,’ but rather is controlled by ‘the underlying facts and circumstances of the claim.’” The court also rejected an argument that the vehicle being “wrapped” in the insured-companies’ advertisement brought it within the course and scope of the companies’ business.

The case is Travelers Indemnity Co. of Connecticut et al. v. Peachstate Auto Insurance Agency Inc. et al., case number 1:17-cv-05156, in the U.S. District Court for the Northern District of Georgia.

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