A Hanover Insurance Group unit is not obligated to provide coverage to a tank testing firm in connection with a propane tanker truck explosion under an exclusion in its policy, says a federal district court.

In March 2016, Bobby Sullivan suffered catastrophic burn injuries when he lost control and crashed a propane tanker truck he was driving, according to Monday’s ruling by the U.S. District Court in Montgomery, Alabama, in AIX Specialty Insurance Co. v. H&W Tank Testing Inc.; Bobby Sullivan and Allison Sullivan.

Mr. Sullivan and his wife, Allison, sued Ohatchee, Alabama-based H&W in state court, alleging the company had been negligent in its testing and inspection of the propane tanker.

H&W had insurance coverage through a commercial general liability policy issued to Windsor, Connecticut-based AIX, a Hanover unit.

AIX denied overage based on an exclusion in its policy for any bodily injury or property damage arising out of an “error, omission, defect or deficiency” in any test performed, according to the ruling. It then filed suit in the District Court seeking a declaratory judgment it has no obligation to defend nor indemnify H&W.

The District Court ruled in AIX’s favor, agreeing with a magistrate judge’s recommendation. The Sullivans said Alabama’s statutory scheme governing liquefied petroleum establishes a public policy of protecting the public “from the unique dangers of propane tanker explosions” and that if the insurer were free to deny coverage, Alabama citizens would “lose the very protection mandated by the legislature,” said the ruling.

But, as the magistrate judge points out, the statutory provision regulates the individuals seeking permits to work with liquefied petroleum gas, not their insurers, and is silent on the insurance coverage at issue, said the ruling.

“Even if the CGL policy issued by AIX did not conform to the statutory requirements, it was H&W’s responsibility to acquire correct coverage. The provision does not impose an affirmative obligation on AIX to provide it,” said the ruling.

“In sum, H&W was required to procure a CGL policy so that it could apply for a permit. The CGL policy it purchased unambiguously excluded coverage for the unfortunate accident that harmed Mr. Sullivan.

“The statutory provisions the Sullivans cite governs permit applicants, not insurance companies or insurance policies, and in any event, it does not limit the exclusions that an insurance policy may contain,” said the ruling in granting AIX’s motion for summary judgment and declaring it has no duty to defend or indemnify the defendants.