Court Opinion

ID: 9001816
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:11:25.564111+00
Date Added: 2024-06-11T17:11:11.922936
License: Public Domain

WILL, Senior District Judge,
dissenting.
I agree that the policy covering Bayer’s tractor-trailer is an “automobile liability” policy based on State Farm’s own definition of “automobile.” I also agree that State Farm has cited nothing in its policy or any other authority which imposes a duty on the insured to notify it of the purchase of an additional vehicle. However, I cannot read the policy’s business operations exclusion to have any application in this case.
The first sentence of policy’s sixth exclusion says that State Farm will not provide coverage “for a loss caused by your business operations unless underlying insurance listed on the Declarations Page provides coverage for the loss.” That is the business exclusion. Business use not covered by policies listed on the declarations page are excluded from umbrella coverage. The majority agrees that the “Automobile Liability” coverage listed on the declarations page does cover the loss, since a tractor-trailer is, under the policy, an “automobile.”
The next sentence begins, “This exclusion ...which refers to the exclusion of business use not covered by policies on the declarations page. The policy provides that “This exclusion will not apply to your private automobile ... for incidental business use if: a. your underlying policy applies to the loss and; b. the automobile ... is not for hire.” So, in addition to providing umbrella coverage for business operations covered by underlying insurance, the policy also will cover business use of a private automobile if the private automobile is covered by underlying insurance and is not for hire. Bayer was not driving a private automobile for business use, he was engaged in business operations with a business vehicle which was covered by the underlying insurance.
The most logical reading of this paragraph is that the policy will cover business operations if the business operations are covered in a declared policy-and/or-the business use of a private automobile if this use is merely incidental. That the business use is not incidental does not by itself mean that the umbrella policy does not kick in, because the business use could be, and here is, covered under a policy listed on the declarations page.
The majority states that under this reading of the exclusion the policy would provide “almost limitless protection for regular business operations involving use 'of some types of automobiles, such as trucking or taxi service, while sharply limiting protection for business use of a private automobile.” But umbrella coverage is only provided for those business operations that are covered by other policies listed on the declarations page. If this is “almost limitless” it is because of State Farm’s own broad definitions. Moreover, there is no disproportionate limit on the business use of private automobiles. The only restriction is that the use must be incidental and be covered by underlying insurance, as must all vehicle use to get umbrella protection. Non-incidental business use of a private automobile would also be covered if the business use were covered by underlying insurance listed on the declarations page. “Business operations” is not confined to “business vehicles.”
The majority correctly states that State Farm “could easily have avoided the prob*526lems it now faces.” It did not. I therefore respectfully dissent.