Employee Must Be Driving
Work Vehicle When Injured
July 2, 2018
The Supreme Court of Indiana has reversed the ruling of the lower court deciding that the deceased man did not qualify as "others we protect" under the Uninsured/Underinsured Motorists Coverage Endorsement in the drivers employers commercial auto policy, when the phrase was unambiguous. The case is Erie Indem. Co. v. Estate of Harris, No. 18S-CT-114, 2018 Ind. LEXIS 455 (June 19, 2018).
In 1993 Erie Insurance Exchange issued a Pioneer Commercial Auto Policy to Formco, Inc., a plastics design and manufacturing company. The Declarations page listed Formco as the only Named Insured. No other Additional Insureds were listed. Formco renewed the policy every year from 1994 to 2010. Formco listed a 2004 Toyota pickup in the "Autos Covered" section, and allowed a longtime employee to drive it as his primary vehicle for both personal and business transportation. The policy included an Uninsured/Underinsured Motorists Coverage Endorsement- Indiana, which afforded coverage for bodily injury and property damage resulting from an accident with an uninsured motorist. The policy stated "We will pay damages for bodily injury and property damage that the law entitles you or your legal representative to recover from the owner or operator of an uninsured motor vehicle. . . Damages must result from a motor vehicle accident arising out of the ownership or use of the uninsured motor vehicle . . . as a motor vehicle and involve. . . bodily injury to you or others we protect." In a later section titled "Others We Protect", four categories of potential claimants for uninsured motorists benefits are listed.
In August, while driving his own personal riding lawnmower at his home, Harris was struck and killed by an uninsured motorist who was high on methamphetamine. Harris' estate filed claims for uninsured motorist bodily injury and MedPay benefits under the policy, which Erie subsequently denied. Harris' estate countered, arguing that as a matter of law, Harris qualified as "others we protect" under the policy when he was struck and killed by an uninsured motorist. The estate argues that because "others we protect" is susceptible to multiple reasonable interpretations, it is ambiguous, while Erie argues that because there is a section titled "Others We Protect" that explains who is protected, the term is unambiguous.
The two lower courts found that "others we protect" was ambiguous, and construed the phrase in the favor of the insured. The Supreme Court of Indiana decided that the term was not ambiguous, as it outlined four types of claimants who might qualify as "Others We Protect" and Harris did not fall into any of the categories, in most part because he was not occupying an auto that Formco owned and Erie insured.
Editor's Note: When a term is found to be ambiguous, the term is to be construed in favor of the insured. The insurer is the party who drafts the contract, so the insurer has an opportunity to clear up any ambiguities within the policy, if they choose to do so. This is why the courts interpret any ambiguity to get the best outcome for the insured. Although it is a truly tragic story, and the death of Harris surely left a hole in the hearts of his family members, the Court determined that his employer's insurer is not on the hook for the Uninsured Motorists benefits. Had Harris been occupying his company vehicle at the time of the accident, Harris' family would have been able to recover something from Erie.