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A Better Partnership
November 26, 2012

COA Opinion: Court considers the "business use" exclusion of an insurance policy

In Hunt v Drielick, a consolidated appeal, the Court of Appeals considered whether a 'business use' exclusion in the trucking company's insurance policy justified denial of coverage. The insurance company had issued a non-trucking or "bobtail" policy that only covered damages incurred when the truck was not engaged in the business of hauling a trailer or under lease to a carrier. In this case, the accident occurred when the trucking company's employee was on his way to a yard to pick up a load of cargo. The insurance company denied coverage based on the business use exclusion, claiming that the truck was under lease to or being used in the business of the yard at the time of the accident. The insurance policy also listed the trucking company employee involved in the accident as an excluded driver.

The trial court held that the insurance company improperly denied coverage. The trial court found that the named driver exclusion failed to comport with statutory requirements. The trial court also found that the business use exclusion was ambiguous. The Court of Appeals disagreed, and reasoned that under Michigan law 'a factual question regarding the applicability of the plan language of an insurance policy 'to specific circumstances does not render the policy language ambiguous.'' The Court of Appeals found there was an issue of fact both as to whether there was a lease agreement between the trucking company and the yard, and whether the truck was being used for a business purpose at the time of the accident. Accordingly, the Court of Appeals remanded the case in order for the trial court to take evidence on this issue. The Court of Appeals affirmed, however, the trial court's holding that the named driver exclusion was invalid because it failed to satisfy statutory requirements.

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