The loaded trailer remained at the Naro site in anticipation of continuing the delivery trip on Monday, May 12, 2008.

The trailer, however, was last seen at Naro on Sunday, May 11, 2008, sometime after noon. At least 75 hours had passed from the time the trailer had arrived at Naro until it had last been seen at Naro.

At approximately 1:00 a.m. on Monday, May 12, 2008, at least 85 hours after arrival at Naro, the trailer and the steel rods were discovered to have been stolen.

On May 13, 2008, Naro submitted a claim to its insurance carrier, Great American Insurance Group, seeking in excess of $210,000 for the stolen goods.

Great American denied the claim, asserting that coverage only was provided for goods while in transit. Great American further asserted that transit had ended after 72 hours had passed with the trailer at the Naro site.

Naro sued.

The trial court granted summary judgment in favor of Great American, and Naro appealed. It argued that the trial court had erred when it had ruled that Naro's stolen trailer had not been in "transit" at the time of the theft.

The Great American Policy

The Great American policy provided:

Covered Property means property of others that you have accepted for transportation as a motor carrier under your tariff and bill of lading or other written contract.

We cover property only while it is:

a. contained in or on a land vehicle while in "transit" and/or during "loading" and "unloading" 

"Transit" begins with the actual movement of the goods from point of shipment bound for a specific destination. It remains in transit during the ordinary, reasonable and necessary stops, interruptions, delays or transfers incidental to the route and method of shipment.

"Transit" ends when any of the following occurs:

1. Covered Property is accepted by, or on behalf of, the consignee at the intended destination or at any intermediate point short of the original intended destination; or

2. seventy-two hours after arrival at destination; or

3. any other stop that exceeds seventy-two hours. 

The appellate court affirmed.

In its decision, the appellate court explained that, in its view, the definition of "'Transit' ends" in the Great American insurance policy included three types of stops. First, when the cargo was accepted by the consignee. Second, when 72 hours expired after the arrival of the cargo at the destination. Third, when any "other" stop took place that exceeded 72 hours. Accordingly, the appellate court continued, "other" as used in the definition of "'Transit' ends" referred to the immediately preceding conditions 1 and 2, and not (as Naro had contended) to the ordinary, reasonably, and necessary stops referred to in the definition of "'Transit' begins."

In other words, the appellate court said, cargo was covered as long as it was in transit. Transit included "any ordinary, reasonable and necessary stop," as long as that stop was less than 72 hours long. Once a stop lasted more than 72 hours, the appellate court concluded, transit ended, and coverage for the cargo ceased – as it had in this case.

The case is Naro Enterprises, Inc. v. Great American Ins. Group, No. 875 MDA 2017 (Pa. Super.Ct. Feb. 20, 2018).