Insurance – Policy Coverage – Excess Liability – UIM – Employer Policy

In this dec action, a Virginia Beach Circuit Court says defendant employee is not entitled to UIM coverage under his employer’s commercial general liability and commercial property policy for the balance of a judgment the employee won after an accident in his personal vehicle while on company business.

Plaintiff carrier, GuideOne Mutual, issued a commercial general liability and commercial property policy to defendant’s employer. The policy has an endorsement saying the insurer will pay all sums an insured must pay as damages resulting from use of a “covered auto.” But the policy does not specifically identify by make or model any vehicle to which this coverage applies. On Sept. 13, 2008, defendant employee was involved in a car accident during the course of his employment. He obtained a judgment against the other driver, who was uninsured, and sought to obtain the remaining amount of the judgment from GuideOne under his employer’s liability policy.

In Stone v. Liberty Mut. Ins. Co., 253 Va. 12 (1996), the Virginia Supreme Court specifically addressed the application of the uninsured motorist statute where an employee sought coverage under his employer’s business auto liability policy. Because the plaintiff was not operating either of the two vehicles specifically listed in the employer’s policy, the Supreme Court found the insurer was not required to provide UIM coverage under Virginia law. As a result, the provision in the policy excluding the plaintiff from coverage was upheld because it did not conflict with the underinsured motorist statute.

At the time of the accident here, defendant employee was operating his own vehicle, which is not specifically listed in the insurance policy here. The exclusion of defendant here from coverage is not inconsistent with the UM statute because he is a second class insured who is only entitled to UIM coverage if he is in “the” vehicle(s) listed in the policy.

Likewise, the exclusion of defendant from coverage does not conflict with the omnibus statute. In construing the language of the omnibus statute, courts have generally held that a named insured cannot give permission to use a vehicle that he does not own. The omnibus statute will not apply to provide defendant primary coverage under his employer’s liability policy. Therefore, the labeling of the policy as “excess” and provisions excluding defendant from coverage are not void as they do not conflict with the statute.

GuideOne is not required to provide the employee with UIM coverage.

GuideOne Mut. Ins. Co. v. Murray (Hanson, J.) No. CL09-5814, Sept. 3, 2010; Va. Beach Cir.Ct.; Mark C. Nanavati for plaintiff; Dennis J. Whelan for defendant. VLW 010-8-167, 4 pp.