Employee not a named insured under employer's automobile insurance policy.

Auto Club Ins. Ass’n v. Sentry Ins., 683 F.3d 889 (8th Cir. 2012)

United States Court of Appeals, Eighth Circuit

Type of Case: Insurance Coverage

Practice Area(s): Appellate Insurance Coverage Insurance – Reinsurance

Lawyer(s): Paula Weseman Theisen Anthony J. Alt

Office(s): Minneapolis

Date: Jul 2 2012

The Eighth Circuit agreed with the district court that an employer’s commercial auto insurance policy provided only excess coverage, at most, to an employee while driving his own auto, even if the employee is involved in an accident while in the course and scope of employment.

The employee’s personal auto insurer argued that the employee was a named insured under the employer’s auto insurance policy, and the employer’s auto insurer was responsible as a primary insurer. At issue was the interpretation of two provisions in the employer’s auto policy: (1) a controlled-entities endorsement providing who was a named insured, and (2) an employees-as-insured endorsement.

The controlled-entities endorsement provided that the employer and listed subsidiaries were named insureds, as well as “any other divisions, subsidiaries and persons and organizations under the control of the named insured.” The employee’s personal auto insurer argued the employee was a named insured because he was a “person.”

The Eighth Circuit concluded that the employee was not a named insured, and affirmed summary judgment in favor of the employer’s auto insurer, Sentry Insurance. The court noted that the controlled-entities endorsement had to be read in light of the more specific employees-as-insured endorsement, which made employees only “insureds,” not named insureds. The employees-as-insured endorsement would be meaningless if employees were named insureds under the controlled-entities endorsement. And it would be unreasonable for the employer’s auto policy to provide primary coverage where the policy specifically provided only excess coverage to employees, at most, under certain conditions.

Meagher & Geer represented the employer’s auto insurer, Sentry Insurance. To read the opinion, click here.

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