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The insurer must defend truck companies in the event of a fatal accident on their property



A federal appeals court on Monday overturned a lower court ruling and ruled that an insurer must defend a trucking company in a fatal accident on its property.

In 2020, a truck driver employed by another company on the property of Midlothian, Texas-based Tarango Trucking LLC, was killed when he was hit by the tractor of a tractor truck whose braking system disengaged while driving a hydraulic lift on its trailer, according to the 5th US judgment. Circuit Court of Appeals in New Orleans i Penn-America Insurance Co. v. Tarango Trucking, LLC.

Bala Cynwyd, Pennsylvania-based Penn-America defended Tarango in the ensuing underlying lawsuit under a reservation of rights.

The insurer then filed a declaratory judgment in the U.S. District Court in Dallas, claiming that a “parking exemption”

; from an automatic exclusion in its CGL policy does not restore coverage.

The district court ruled that the insurer had no obligation to defend or reimburse the trucking company, but was overturned by a court panel with three judges.

The verdict said that it agreed with the truck company “that the parking exemption applies to bodily and property damage that occurs during parking.

“Since the petition claims certain claims arising out of parking and potentially covered by the policy, Penn-America must defend Tarango in the underlying action,” it said, while saying it was too early for the district court to decide on the issue of damages.

Plaintiff’s attorney Sandy McCorquodale, of the Law Office of the Sandy McCorquodale PC in Dallas, said the 5th Circuit’s decision was “well reasoned” and includes a more detailed discussion of the parking exemption than in most cases dealing with this standard exemption.

“The case still has a way to go on the obligation to make amends, but we will address it when we return to the lower court,” he said.

The insurance company’s lawyers did not respond to a request for comment.


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