Eduardo Silva worked for company that transported cars to and from auto dealerships. While driving a tow truck to pick up a car for a dealership Silva struck a vehicle in which plaintiff Rita Borden was a passenger. Borden's medical bills exceeded the amount of primary insurance available through the tow truck's insurer. She turned to the insurer of Silva's personal car, which was covered under a Progressive Insurance policy issued in Rhode Island.
Progressive denied the claim for excess coverage under Silva's personal automobile policy on the basis of its automobile business exclusion. The exclusion provided that coverage did not apply to "bodily injury . . . arising out of an accident involving any vehicles while being maintained or used by a person while employed or engaged in any auto business." The policy defined auto business as "the business of selling, leasing, repairing, parking, storing, servicing, delivering or testing vehicles."
In Borden v. Progressive Ins. Co., __ N.E.3d __, 2014 WL 8850495 (Mass. App. Ct. 2015*), the Massachusetts Appeals Court held that the loss was excluded. It noted that the automobile business exclusion has been used to apply to cases involving the insured's use of a nonowned vehicle in the course of employment. While an insurer of a personal automobile is expected to provide coverage for an insured's occasional or infrequent use of other vehicles, the court held that the risk of Silva's use of the tow truck in the course of his employment falls outside the range of ordinary risks contemplated by insurer of personal automobiles.
The court also held that towing vehicles unambiguously falls within the definition of "the business of . . . delivering . . .vehicles."
This decision once again underscores the importance of purchasing underinsurance and uninsurance coverage. Those coverages protect you if you are injured by someone with inadequate auto insurance. They cover the difference between the negligent driver's insurance and the coverage that you purchase. (So if the negligent driver has $100,000 in coverage and you have $300,000 in underinsurance coverage, the negligent driver's policy covers the first $100,000 and your policy covers the next $200,000.) That way you do not have to depend on insurance decisions made by the person who injures you to have a reasonable amount of coverage after an accident.
* Although the Westlaw citation indicates a 2014 decision, the case was decided on May 21, 2015.