02/11/2008 06:31:39 PM EST
Dan D. Kohane on Guishard v. General Security Insurance Company
When is an accident involving an automobile not an “automobile accident” for the purposes of liability insurance coverage? Often, the practitioner needs to know whether the automobile liability carrier or a general liability insurer has the obligation to defend and indemnify a motor vehicle owner. The Court of Appeals discussed this issue in Guishard v. General Security Insurance Companywhen an injury occurred during the conversion of a van to an ice cream truck. The Court held while the accident occurred in and about a vehicle, conversion of a truck was not “maintenance” of the vehicle and thus outside of the ambit of the auto policy.
In this commentary, author Dan D. Kohane, a senior partner in the Buffalo, New York law firm of Hurwitz & Fine, P.C. and an adjunct Professor of Insurance Law at the Buffalo Law School, writes: “This case reminds us that it is critically important to identify the proper carrier entitled to notice following an accident. Not all accidents involving cars or trucks are “motor vehicle” accidents where coverage is provided by an auto carrier. The location of the accident provides guidance, but not necessarily the answer to the question: ‘who insures this risk?’”
The author also cautions practitioners to promptly notify the appropriate insurer after an accident or loss or when litigation is commenced. Kohane writes: “Best practices dictate that counsel act quickly to provide notice as a failure to comply with contractual provisions can result in a loss of liability coverage.”
Kohane also discusses the relationship between the CGL Policy and auto accidents and advises attorneys, when faced with the question of determining which carrier is entitled to notice and likely to defend, to focus on the cause of the accident and not just its location. In addition, Kohane reviews the importance of rules of contract construction and courts’ interpretation of the term “maintenance” in exclusionary provisions that remove claims from coverage under a CGL Policy.
For a more thorough discussion of the Auto Exclusion in the CGL policy, Kohane refers readers to APPLEMAN ON INSURANCE LAW AND PRACTICE (2nd Ed.),Volume VI, Liability Insurance, Chapter 132 “COVERAGE A” EXCLUSIONS IN THE COMMERCIAL GENERAL LIABILITY (CGL) INSURANCE POLICY, 21-132 Appleman on Insurance § 132.1.