A policy exclusion still applies, even if the policy itself does not meet technical requirements such as including a table of contents, a federal appellate court said on Wednesday, when it overturned a lower court decision.
The case concerns Belgrade, Montana-based High Country Paving Inc., which purchased a liability insurance policy from United Fire & Casualty Co. which included commercial car liability insurance, commercial umbrella coverage and commercial general liability protection, according to court papers in High Country Paving, Inc. v. United Fire & Casualty Co.
In August 2016, a High-Country employee was driving a truck and trailer from the company when the trailer came loose and hit another vehicle, killing the driver and injuring the passenger.
To settle the resulting claims, United Fire paid the total limits of $ 3 million for commercial car and umbrella policies but denied coverage under the CGL policy based on an exemption from aircraft, cars or craft and a limitation of multiple liability coverages.
United Fire argued that the exclusion of aircraft, cars or watercraft was valid because the damage was due to the use of a vehicle towing a loaded equipment trailer, and therefore arose from the use of a car.
In subsequent litigation, the U.S. District Court in Missoula, Montana, ruled in favor of the High Country, finding that although its insurance contract “unequivocally”; excluded coverage, the exemptions were not enforceable under Montana law.
The 9th Circuit asked Montana’s Supreme Court to consider whether, if an insurance policy does not contain a table of contents or a notice of important provisions in violation of the State Code, the insurer can still rely on unequivocal exceptions or limitations of the insurance. reporting
In a judgment of April 12, Montana’s Supreme Court agreed that the exceptions could still be invoked “where, as here,” annulling such a provision would result in an increase in the risk adopted. “
Referring to that decision, a three-judge panel of judges changed the lower court, stating that the exemptions for aircraft, cars or watercraft “are therefore both unambiguous and enforceable.”
Lawyers in the case did not respond to a request for comment.