It is a good idea to know what your insurance covers and does not cover. This way, if your course of business has you performing a certain (risky) operation, you know whether that operation is covered or excluded under your policy. If you are not sure, discuss with your insurance broker — this is important. There is little value performing an operation that is NOT covered by your insurance policy, as you are now performing a risk that is not covered by insurance. If you know it is not covered by insurance you may elect to change your operations or see if there is insurance to cover the risk. Below is a case study of this occurrence dealing with a commercial automobile liability policy where an insured’s operations using a crane mounted to a super duty truck was not covered under their automobile liability policy.
In People’s Trust Ins. Co. v. Progressive Express Ins. Co., 46 Fla. L. Weekly D262a (Fla. 3d DCA 2021), homeowners hired a company to install a shed. The company hired another company to deliver and install the shed using a crane; the company used a crane mounted to a Ford F-750 super duty truck. This company improperly operated the crane resulting in the shed falling and damaging the homeowner’s roof. The homeowners submitted a claim to their property insurer and their property insurer subrogated to their rights and sued. The company operating the crane’s commercial automobile liability insurer denied coverage, and thus, denied the duty to defend. As a result, a Coblentz-type agreement was entered into where the company operating the crane consented to a judgment in favor of the property insurer (subrogee) and assigned its rights under its commercial automobile liability policy to the property insurer. The property insurer then sued the automobile liability carrier for coverage. The trial court granted summary judgment in favor of the automobile liability insurer finding there was no coverage and this was affirmed on appeal. Why?
The coverage issue focused on whether a crane mounted to a super duty truck (Ford F-750) was covered or excluded by the commercial automobile liability policy.
The policy included a mobile equipment exclusion; however, mobile equipment did not include, “land vehicles that are subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state or province where it is licensed or principally garaged. Land vehicles subject to a compulsory or financial responsibility law or other motor vehicles are considered autos.” The Ford F-750 super duty truck would not constitute mobile equipment excluded by the policy because it would be a land vehicle subject to a compulsory or financial responsibility law or other motor vehicles insurance law.
However, the crux of the issue was the crane mounted to the Ford F-750 super duty truck. The policy also excluded coverage for, “Bodily injury, property damage…arising out of the operation of:…b. machinery or equipment that is on, attached to, or part of, a land vehicle that would qualify under the definition of mobile equipment if it were not subject to a compulsory or financial responsibility law where it is principally licensed or principally garaged.”
Based on this exclusion, the Court held:
The truck, “used primarily to provide mobility to a mounted crane,” would be excluded “mobile equipment” under the relevant definition, but for the fact that it is subject to a compulsory or financial responsibility law. The contract contemplates this exact situation. Next, we look to the “13.b. exclusion” which directs us to exclude any claim for property damage “arising out of the operation of . . . machinery or equipment that is on, attached to, or part of, a land vehicle that would qualify under the definition of mobile equipment if it were not subject to a compulsory or financial responsibility law where it is licensed or principally garaged.” There is no dispute that the crane was in use at the time of the incident and that the property damage arose out of the operation of the crane. Where, as here, the record clearly established that the damage at issue was caused by the mounted crane, in operational use, on a vehicle that would otherwise qualify as mobile equipment, the trial court correctly granted summary judgment in favor of [the automobile insurer] on the policy exclusion and properly entered final judgment in accord with such findings.
People’s Trust Ins. Co., supra.
In other words, the company that used the crane mounted to its super duty truck performed an operation excluded by its commercial automobile liability insurance policy. The company would have been better to know whether this risk was covered or excluded under its policy, see if it could obtain coverage for this operation, or switch its operation appreciating the uninsured risk associated with performing the operation in this manner.
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