Michael Baumann hit personal injury lawyer Darryl Isaacs with his truck while Isaacs was cycling on River Road in Jefferson County, Kentucky. Isaacs and his wife Theresa sued Baumann, an underinsured motorist, only to have an Underinsured Motorist Claim (UIM) denied that he was not insured in the professional service company policy with Sentinal in Darryl Isaacs And Theresa Isaacs v Sentinal Insurance Company Limited D / B / A The Hartford, 2018-SC-0078-DG, Supreme Court of Kentucky (September 24, 2020)
Since Baumann was an underinsured motorist, Isaacs filed a claim for underinsured motoring coverage ( UIM) according to the commercial insurance policy that covered vehicles owned and used during the business of Isaacs Law Firm (Isaacs & Isaacs, PSC). Sentinel Insurance Company, denied UIM's claims under its business policy.
Sentinels commercial policy listed "Isaacs & Isaacs, P.S.C." as it assured on its explanatory side – not Darryl Isaacs. Isaacs did not purchase Sentinel Insurance and had no direct involvement in matters relating to his company's commercial insurance, as these matters were delegated to other law firm employees. The vehicles covered by the Sentinel policy were stored at the law firm for its use in addition to the car that Isaacs drove to and from work. The cars were an accounting asset and the company's cost and employees were only allowed to use them for business purposes. Isaacs did not drive any of the cars covered by the Sentinel policy at the time Baumann hit Isaacs' bicycle with a motor vehicle. Sentinel policy according to the facts of the case.
The Supreme Court noted that it has long been the law of this Commonwealth that the summary judgment should only be used to settle disputes when, as a legal issue, it appears that it would be impossible for the respondent to present evidence at the trial which justifies a judgment in his favor and against the person concerned.
Summary judgment is appropriate if the person concerned shows that the negative party could not win under any circumstances.
Darryl Isaacs formed Isaacs & Isaacs, PSC, a professional service company in which he is the sole shareholder. Sentinels commercial insurance is called Isaacs & Isaacs, P.S.C. as named on the insurance side of the policy. The terms of the policy make it clear that if the insured is a "company" or "any other form of organization", the insured under UIM coverage is limited to the persons occupying a covered car at the time of the engine accident.  Professional service companies are business units. A professional service company in Kentucky, formed in accordance with the provisions of a charter shall have the same powers, powers, obligations and obligations as a company formed in accordance with, and shall be otherwise governed by the Kentucky statutes. If Isaacs and his P.S.C. were, as he argues, one and the same, he would have had no reason to form the P.S.C. and he would not be able to claim the company's limited liability for.
Sentinel did not ask about the identity – or even the number – of P.S.C .: shareholders. If the policy was intended to provide UIM coverage to shareholders when they were not driving PSC vehicles covered by the commercial policy, knowledge of how many people Sentinel provided UIM coverage would be necessary information for Sentinel to assess the risk and indicate the amount of premiums. . Isaacs claims he was the sole shareholder in this case, but some PSCs have a large number of shareholders.
Isaacs claims that they are entitled to UIM benefits under Sentinel's commercial policy because "UIM coverage is personal to the person who purchased the reporting." But Isaacs was not the insured. He did not buy the cover, nor did his name appear on the policy explanation page.
The reasonable expectations for coverage are met as long as the simple meaning of the terms of the underlying policy is clear and unambiguous. There was no ambiguity here. Isaacs & Isaacs, P.S.C., is a type of company – and the policy explicitly defines the class of protected persons when the said insured is a company. The coverage does not apply to Isaacs because he did not drive a vehicle owned by P.S.C. Had he been the insured under the insurance or if he had been the owner of a covered car at the time of the accident, Sentinel's UIM insurance would have covered him.
Since Isaacs delegated the purchase of insurance for P.S.C. to an employee of his company, he could not complain that the employee failed to have the Sentinel name Darryl Isaacs as the named insured. I ran a professional company and all my insurances called the company and I as an individual, insured. Since Isaacs was not insured on the Sentinel insurance, he received nothing because the insurance that his company bought only covered him while he was driving one of the company vehicles. He was injured on a bicycle that was obviously not one of the vehicles.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to employment as an insurance consultant specializing in insurance coverage, insurance claims management, fraud and insurance fraud almost equally for insurers and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
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