AIG loses underinsured motorist case under commercial policy

An American International Group Inc. unit is obligated to provide coverage under the uninsured/underinsured motorist coverage endorsement of its commercial auto policy in connection with an employee’s accident while in her own car, says a federal court, in denying the insurer summary judgment in the case.

AIG unit National Union Fire Insurance Co. of Pittsburgh, Pa. issued an automobile insurance policy to New Waterford Ohio-based Dynamic Structures Inc., which does business as Clear Creek Oil Fields Solutions, effective July 1, 2017, through July 1, 2018, according to Thursday’s ruling by the U.S. District Court in Akron, Ohio, in National Union Fire Insurance Co. of Pittsburgh, Pa. v. Lauren Paterson. The policy provided up to $1 million in coverage.

Dynamic Structures paid its employees for one-hour travel time to one of its work sites and one hour of return travel, according to the ruling. It provided transportation for its workers to and from the work site, but on Sept. 15, 2017, Dynamic Structures employee Ms. Paterson drove her own automobile to the site with Dynamic Structure’s permission, and she was compensated for the travel time, according to the ruling.

She had an automobile accident that day, and sought coverage under the policy, which National Union denied. Each party asked the court to decide whether the insurer was obligated to provide coverage under the policy.

The court ruled in Ms. Paterson’s favor. Ms. Paterson meets the definition of “employee” under the policy, “Therefore, the only question remaining is whether Dynamic Structures owned the automobile involved in the September, 15, 2017 accident by virtue of hiring Paterson’s automobile, borrowing Paterson’s automobile, or leasing Paterson’ automobile as contemplated by the Employee as Lessor endorsement, thereby entitling Paterson to Uninsured/Underinsured Motorists Coverage of the Policy,” said the ruling.

“Because control and possessions are not required to find that Dynamic Structures hired Paterson’s automobile, this Court can reach only one conclusion,” said the ruling.

“Paterson was completing a work-related activity and was being paid by Dynamic Structures at the time of the automobile accident. Therefore, at the time of the automobile accident, Dynamic Structures had procured the use of Paterson’s automobile for a set price.

“This means that Paterson’s automobile was hired by Dynamic Structures at the time of the automobile accident and Paterson is entitled to the Uninsured/Underinsured Motorists coverage of the Policy,” said the court, in ruling against National Union

Attorneys in the case could not be reached for comment.

A federal appeals court affirmed a lower court ruling in August and held an Uber Technologies Inc. driver is not entitled to insurance coverage for injuries suffered in an accident that occurred after she dropped off a passenger.