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Does ‘umbrella’ coverage on trailer extend to tractor?

Written by Steve Gursten Posted March 24th, 2017

Trailer’s umbrella coverage handles tractor damage because insurance policies covering both are applicable when tractor-trailer is involved in truck accident

Umbrella Coverage

One of the hugely important issues in trucking litigation — after liability and damages to the truck accident victims are determined — is figuring out what insurance coverage applies, such as umbrella coverage.

It frequently devolves into the defense lawyers hired by a trucking company’s insurance company playing semantics, trying to convince judges (who usually know better) to overlook the forest for the individual trees.

Just such a thing happened in a case being fought by my friend, colleague and Truck Accident Attorneys Roundtable co-founder Joe Fried.

After a truck driver negligently drove a tractor-trailer into a car, injuring the occupants, the insurance company that issued a $10 million “umbrella” policy on the trailer tried to get out of paying by arguing that it covered only the trailer portion of the tractor-trailer — not the tractor portion, which is what struck the car.

Thanks to Joe’s skill as a litigator and trial attorney — and thanks to a wise and law-driven court — the umbrella coverage insurer’s position proved to be a dead-end.

In Great American Insurance Company v. Moore Freight Service, Inc., et al., the U.S. District Court of the Northern District of Georgia, Atlanta Division, rejected the umbrella coverage insurer’s contention that its coverage of the trailer did not apply to cover damages from the truck accident because “‘solely the tractor driven by [the truck driver] … caused the accident …’”:

  • “[T]he law is clear that when a tractor-trailer is involved in an accident, the insurance covering both the tractor and the trailer are applicable.”
  • The U.S. Circuit Court of Appeals for the 5th Circuit has noted that “‘nearly every jurisdiction to face the question has held that an accident involving a tractor/trailer unit arises out of the use of both regardless of which part of the unit was actually involved in the accident.’”
  • “[T]he insurance policies covering both the tractor and the trailer are applicable when a tractor-trailer is involved in an accident, regardless of which part of the tractor-trailer actually makes contact with the injured party’s vehicle.”
  • “[I]t does not matter what part of the tractor-trailer actually made contact with the [victims’] vehicle during the [truck] accident.”

This is the right ruling. It is consistent with well-established law. It also hopefully sends a message to truck carriers – and their insurance companies – that there’s no place for “gameplaying” when it comes to covering and providing compensation to innocent, truck accident victims.

If umbrella coverage insurer doesn’t want to cover the tractor, but only the trailer, then just say so

To the unhappy umbrella coverage insurer in Great American Insurance Company, the U.S. District Court offered the following advice:

  • “If [the umbrella coverage insurer] intended for trailers not to be covered when they are attached to tractors, Plaintiff had the responsibility of making the policy clear on that point.”
  •  “Where there is ambiguity, the policy must be liberally construed in favor of coverage and ‘strictly construed against the insurer’ who prepared the contract.”

Great American Insurance Co. tries to avoid paying on ‘umbrella’ coverage

Truck driver John Teal, who was an employee of Moore Freight Services, Inc., was 100% at-fault in causing a truck accident that resulted in severe injuries to Eshan Khan.

The trailer attached to the tractor that Teal was driving was owned by Colonial Cartage Corporation.

Colonial Cartage had (i.e., it was the “named insured” on) a primary $2 million policy with Liberty Mutual Fire Insurance Company and a $10 million “umbrella” policy with Great American Insurance Company.

After the truck accident, Great American tried to get out of paying by insisting its coverage extended only to the trailer, not the tractor-portion of the tractor-trailer.

Steven Gursten Photo

About Steve Gursten

Attorney Steven Gursten is president of the Motor Vehicle Trial Lawyers Association and past president of the American Association for Justice Trucking Litigation Group. He has been named a Michigan Lawyers Weekly "Leader in the Law" for his efforts to prevent truck accidents and promote national truck safety. Steve was also a Michigan Lawyers Weekly "Lawyer of the Year" for a record settlement in a truck accident case. He has received the top reported truck accident jury verdict and top reported truck accident settlement in Michigan for multiple years, according to published year-end compilations of all jury verdicts and personal injury settlements by Michigan Lawyers Weekly. He has been named a "Top 50 Super Lawyer," by SuperLawyers, is listed in Best Lawyers in America, and has been awarded an AV-rating by Martindale-Hubbell, which is the highest rating for legal ability and ethics. Steve speaks to lawyers throughout the country on truck accident litigation. He is a founding member of the Truck Accident Attorneys Roundtable, head of Michigan Auto Law, and has dedicated his legal career to making our roads safer.