Court rules against Munich Re in dispute over delivery truck accident

A federal appeals court has upheld a lower court ruling against a Munich Reinsurance Co. unit in connection with an injury caused by a delivery driver.

In 2014, a delivery driver for Denver-based Prestige Delivery Services Inc. injured a man in the course of delivering goods on behalf of Framingham, Massachusetts-based Staples Inc., according to Thursday’s ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in United Financial Casualty Co. v. The Princeton Excess and Surplus Lines Insurance Co.

The injured man filed suit against the driver, Prestige and Prestige’s client, Staples. Mayfield Village, Ohio-based United Financial, the driver’s insurer, provided a defense for all three defendants in the lawsuit, which was subsequently settled.

United then filed suit in U.S. District Court in Philadelphia against Princeton, a Princeton, New Jersey-based unit of Munch Re, which was Prestige’s insurer, on issues including which policy was primary and who should bear the costs for the direct liability claims.

The District Court ruled Princeton was primary and solely responsible for the costs of defending the direct liability claims. A unanimous three-judge appeals court panel upheld the ruling on appeal.

“The United policy contains a definition that explicitly limits responsibility for the insured … to injuries that arise out of (the driver’s) direct conduct,” the ruling said.

“With regard to the direct liability claims against Staples, we note that Princeton’s policy states that its coverage will be considered ‘primary’ for any liability assumed under an ‘’insured contract,’” the ruling said.

The delivery service agreement negotiated between Prestige and Staples “strongly suggests that the contract between Prestige and Staples was an ‘insured contract.’

“Accordingly, Prestige bears primary coverage for claims of direct liability against Staples,” said the ruling, in affirming the lower court’s decision.