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A Better Partnership
September 20, 2013

MSC questions COA’s interpretation of “business use” exclusion in a “bobtail” auto-liability policy, granting leave

“Bobtail” policies only cover damages incurred when a commercial truck is not engaged in the business of hauling a trailer or under lease to a carrier.  In Estate of Hunt v. Drielick, the multi-vehicle 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 under the policy's "business use" exclusion, claiming the truck was under lease to or being used in the business of the yard at the time of the accident.  See our earlier blog here, discussing the court of appeals' decision. In the Michigan Supreme Court, the parties will address:

(1) whether a lease agreement is legally implied between Roger Drielick Trucking and Great Lakes Carriers Corporation under the facts of the case and under applicable federal regulation of the motor carrier industry; and

(2) if so, whether the Court of Appeals erred in resolving this case on the basis of the first clause of the business use exclusion in the non-trucking (bobtail) policy issued by Empire Fire and Marine Insurance Company, instead of on the basis of the second clause, which excludes coverage for “‘[b]odily injury’ or ‘property damage’ . . . while a covered ‘auto’ is used in the business of anyone to whom the ‘auto’ is leased or rented.”

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