A collision occurred next to a curbside work site where a trailer-mounted grinder was being used to remove a tree stump. The person removing the stump was not directly involved in the accident, yet he was sued! Things got complicated as both a CGL and a Commercial Auto insurer were entangled by the situation. Most of the effort in resolving the situation was in determining precisely how the landscaper contributed to a collision that occurred at the spot where he was working.

Click below to find out whether the tree guy was found liable for the severe injuries that resulted from the loss.

The problem the landscaper ran into was a bit unusual. He found himself being sued for injuries from an accident where he was not a driver. The confusion was accompanied by the involvement of both a Commercial General Liability and a Commercial Automobile policy being in effect at the time of the loss.

Eventually, the insurance company disputed which policy owed coverage as well as how defense costs should be handled. Initially, the CGL carrier took the lead in defending the claim and paying defense costs. A settlement was reached where the carriers split payment of the award and the defense expense. After much wrangling over a separate lawsuit the auto carrier filed against the CGL insurer, an appellate ruling determined that only the Commercial Auto policy was responsible for covering the loss.

Click here for a handy bit of information about the key exposures that accompany landscaping operations. It is from the Commercial Lines Survey found in Advantage Plus.

The heart of the issue is how coverage applies to mobile equipment (often also known as contractors’ equipment). It refers to equipment used in construction. It is machinery with specialized functions that are mounted on wheels or treads, allowing them to move around job sites or for self-transportation (examples include cherry pickers, bulldozers, scissor lifts, etc.)

Depending upon circumstances at the time of a loss, mobile equipment could qualify for coverage under a CGL or a business auto policy. Specifically, should a loss occur, how was the equipment being used? If anchored in place to facilitate the machine’s operation, it generally is covered under a CGL. If it’s in motion like a vehicle (including aspects of vehicle use such as entering/exiting, being upon, loading/unloading, etc.) its protection is provided by the business auto form. However, courts may interpret things differently. In our case, the landscaper was found to have contributed to the loss. A higher court reasoned that his placement of a grinder attached to a trailer at a curb next to the stump he was removing, affected traffic. That was interpreted as a form of auto use.

Click here for some helpful information on situations that are covered by a Business Auto Policy. It is from the Commercial Liability section of Gordis on Property and Casualty Insurance found in Advantage Plus.

We mentioned that, eventually, the landscaper was held to have some responsibility for the collision that occurred next to his jobsite. Besides having parked his equipment in a manner that obstructed traffic, he also failed to use markers and warning signage that could have alerted passing drivers. These factors convinced an appellate court that, for all intents, he impacted traffic through the use of a vehicle. This led to the commercial auto policy taking responsibility for coverage and releasing the CGL carrier from liability.

It's likely the landscaper’s head was spun by the outcome. It’s easy to believe, when the collision occurred near his jobsite, he saw himself as having zero involvement since he was not a direct part of the accident. That is where an insurance professional with a keen eye for mitigating risk could have been invaluable. Businesspeople generally have a myopia for performing their tasks. Yes, they are served well by having an insurance program in place to meet most of their coverage needs. However, losses impact future coverage options and costs. Being made aware of the importance of tools and protocols that avoid or, at least, reduce chances of loss is ideal. Enhancing their awareness helps us all!

Click here for an article discussing some aspects of mobile equipment, how it is treated for insurance purposes and a list of examples. It is from E-marketing for Agents found in Advantage Plus.