University’s insurance covers bus driver, Ohio Supreme Court says

From Trial Magazine, January 2011

As a truck accident lawyer, I was pleased to contribute to a recent article in Trial Magazine concerning insurance coverage of a bus driver.

The article discussed the Ohio Supreme Court’s recent decision that a driver of a rented bus is covered under a university’s auto insurance policy. (Fed. Ins. Co. v. Exec. Coach Luxury Travel, Inc., 2010 WL 5392904 (Dec. 28, 2010).)

The case concerns a devastating 2007 accident in which a bus fell off an exit ramp, killing the bus driver, Jerome Niemeyer, his wife, and five Bluffton University baseball team members and injuring other passengers.

As the article explains:

“The plaintiffs—injured passengers and the families of those killed—argued that Niemeyer was an insured because he drove a bus, with Bluffton’s permission, that Bluffton hired. Federal and American each filed a declaratory judgment action, arguing that the university did not hire but rather contracted for transportation services, making Niemeyer an independent contractor and unforeseen third party they did not intend to cover.

In a 5-2 decision, the Ohio Supreme Court sided with the plaintiffs, reversing the lower court’s ruling. Considering the plain meaning of “hire” and “permission,” the court held that Niemeyer was an insured.

Justice Paul Pfeifer wrote for the majority, “We are not persuaded by the contention that the driver of a bus that Bluffton rented from a company in the business of renting buses is an unforeseen third party, when a clause in the insurance policy covers ‘anyone else’ driving a hired auto.” He added, “Whether the insurance company intended the clause to apply is immaterial because the language of the policy supports a conclusion that Niemeyer is an insured.”

Justice Evelyn Lundberg Stratton dissented. “Today’s opinion unreasonably extends coverage to a third party and effectively opens the door for similar claims under other scenarios because the omnibus clause is standard in many insurance policies,” she wrote.”

In the article, I agreed that the “owned, hired, or borrowed” language is common. However, I felt the decision was a “commonsense” interpretation and it “will have a positive effect on other cases that deal with insurance coverage of commercial vehicles.”  I also added, “The courts have said, ‘We want to protect the public and find insurance where it reasonably can be found.’”

The insurance companies have filed a motion for reconsideration.

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