The Supreme Court, Appellate Division, Fourth Department, New York was faced with a question as to whether the insured’s farmowners policy applies to a claim arising from an auto accident that occurred off the insured’s premises. This case is McLaughlin v. Midrox Insurance Company, 894 N.Y.S.2d 648 (2010).

The plaintiffs in an underlying personal injury action brought suit against the defendant’s insurer seeking a determination that it was obligated to indemnify the defendant/insured. The trial court ruled in favor of the plaintiffs and this appeal followed.

The appeals court noted that the insurer (Midrox) provided insurance coverage for Blodgett under a farmowners policy. Blodgett had injured McLaughlin when the motor cycle he (McLaughlin) was driving collided with a pickup truck owned and driven by Blodgett. Midrox disclaimed any coverage for the claim on the ground that the accident occurred off the insured premises. The farmowners policy did provide coverage for liability for injury and damage that “occurs on the insured premises and results from the ownership and use of motorized vehicles not subject to motor vehicle registration; the insured premises included the main farm as well as any premises used in connection with the farm, the approaches to, and access ways immediately adjoining the insured premises, and other land the insured uses for farming purposes.

Midrox contended that its policy did not provide coverage because the accident occurred on a public roadway. The appeals court concluded that the various definitions of insured premises in the policy were broad enough to include public roadways used by the insured to transport workers and materials between the main farm and farms that the insured leased (in this case, one that was approximately nine miles from the main farm).

The insurer also contended that there was no coverage because the insured had chosen to register the vehicle as an agricultural vehicle rather than a farm vehicle. And, since the insured did that, the insurer contend the pickup was subject to motor vehicle registration, thereby violating the policy insuring agreement. The appeals court said the fact that the insured elected to register the vehicle as an agricultural vehicle did not deprive the insureds of coverage inasmuch as the pickup truck was used exclusively for farm purposes, and the accident occurred along the most direct route between two farm parcels. The exclusive use of the pickup as a farm vehicle by the insured negated any requirement for motor vehicle registration.

The final argument of the insurer was that the term “premises” within the meaning of the policy was not intended to encompass public roadways. But the appeals court said that that restrictive interpretation was not supported by the language of the policy which neither actually defined the word “premises” nor excluded public roadways from its purview. The court concluded that the accident occurred on the “insured premises” within the meaning of that phrase in the farmowners policy.

The judgment of the trial court was unanimously affirmed.

Editor’s Note: This ruling by the court of appeals confirms the obvious: it is the court’s interpretation of policy language, and not the insurer’s interpretation, that will prevail in coverage disputes. And any interpretation of a word or phrase that can reasonably be made in favor of coverage for the insured, will be made.