Insurance – Carrier prevails in coverage dispute

Where an individual conceded that he was not entitled to coverage under a primary policy, but argued he was nevertheless entitled to coverage under an umbrella policy, this argument was rejected. The umbrella policy provided that its auto liability coverage “will not be broader than” that of the primary policy.

Background

Philadelphia Indemnity Insurance Company issued two insurance policies to TLC Home Health, Inc. On Jan. 21, 2023, an automobile operated by Aelijah Christian was involved in accident with Larry Wood. The vehicle operated by Christian was owned by TLC. Wood sued both Christian and TLC.

At the conclusion of trial, the circuit court granted TLC’s motion to strike based on the lack of evidence that Christian was an agent or employee of TLC. The jury returned a verdict against Christian and in favor of Wood in the principal amount of $4,350,000.

Philadelphia brought this action seeking a declaratory judgment to determine its obligations to TLC and Christian under both policies.

Analysis

Plaintiff contends that because Christian was driving a vehicle owned by TLC, the vehicle is not a covered auto under either policy. Wood does not dispute this contention as to the primary policy. The dispute instead centers on the scope of coverage under the umbrella policy.

Central to the present dispute is the proper interpretation of the Automobile Liability (Sublimit) Endorsement contained within the Umbrella Policy. Plaintiff contends that the Endorsement expressly limits auto liability coverage under the Umbrella Policy to the same terms and exclusions as the Primary Policy.

Defendant argues that the Endorsement is ambiguous and that, under well-settled Virginia law, when a genuine ambiguity is present in an insurance policy, Virginia courts resolve that ambiguity in favor of coverage. The court agrees with the plaintiff.

Read as a whole, the three paragraphs of the Endorsement establish a coherent and unambiguous framework for auto liability coverage under the Umbrella Policy. The only policy of auto liability insurance listed in the Schedule of Underlying Insurance is the Primary Policy. By the express terms of the Endorsement, therefore, the Umbrella Policy’s auto liability coverage is limited to the provisions, exclusions and limitations of the Primary Policy.

The Primary Policy only covers vehicles TLC leased, hired, rented, borrowed or did not own, and is clear that it does not cover vehicles owned by TLC. Because the Umbrella Policy’s auto liability coverage will not be broader than that of the Primary Policy, and given that Christian was operating a vehicle owned by TLC, the Umbrella Policy therefore does not cover the TLC-owned vehicle Christian operated at the time of the accident. The court rejects defendant’s argument that the Endorsement is ambiguous.

Plaintiff’s motion for summary judgment granted. Defendant’s motion for summary judgment denied.

Philadelphia Indemnity Insurance Company v. TLC Home Health, Inc., Case No. 3:25-cv-120, June 4, 2026. EDVA at Richmond (Hudson). VLW 026-3-248. 16 pp.

Full-Text Opinion
LW 026-3-248