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Nationwide units liable for work-related car accident

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Nationwide Mutual Insurance Co. units are obligated to provide coverage in a case where a policyholder’s executive was involved in an accident that killed another driver, says an appellate court, in upholding a lower court ruling in favor of the executive’s personal insurer.

While on his way to attend an interview with a prospective employee, Jason Onstott, vice president and treasurer of Holland, Michigan-based Western Tel-Com Inc., sped through a stop sign in 2013 and hit the passenger side of a pickup truck, according to Friday’s ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Home-Owners Insurance Co. v. Allied Property and Casualty Insurance Co..; Amco Insurance Co.

The truck’s passenger, David Bremer, died during surgery while the driver, Glenn Alan Kleinheksel, suffered a broken pelvis, broken leg, broken wrist, broken foot and compressed vertebrae, according to the ruling. Settlement agreements later were reached with Mr. Bremer’s estate and Mr. Kleinheksel.

Mr. Onstott subsequently spent five days in jail, served six months on probation and paid fines and fees in connection with the accident.

Lansing, Michigan-based Home-Owners Insurance, which had issued Mr. Onstott’s automobile and personal insurance policies, filed suit against Western Tel-Com’s insurers, Allied Property and Amco Insurance Co., which are units of Columbus, Ohio-based Nationwide Mutual Insurance Co., seeking a declaratory judgment they bore ultimate responsibility to cover Mr. Onstott and the company’s liability for the accident.

The U.S. District Court in Grand Rapids, Michigan, granted Home-Owners summary judgment, which was unanimously affirmed by a three-judge appellate panel.

“In sum, we hold that Home-Owners rightly stands on Onstott’s shoes to seek access to defendants’ insurance coverage,” said the ruling. Western Tel-Com is liable because it had agreed to indemnify Mr. Onstott, and this liability is covered “in full” by the Nationwide units’ policies because they had agreed to provide the company with primary coverage, said the ruling.