Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

Phone: 602-322-4038

Steven Plitt, Expert Witness

Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

NORTH DAKOTA SUPREME COURT RULES THAT REGULAR USE EXCLUSION IN EMPLOYER’S AUTOMOBILE POLICY WAS NOT ENFORCEABLE

On Behalf of | Sep 23, 2021 | Insurance Law

In Pioneer State Mutual Insurance Company v. Bear Creek Gravel, Inc., 956 N.W.2d 377 (2021), the North Dakota Supreme Court affirmed a trial court ruling finding that a regular use exclusion set forth in an employer’s policy did not impose restrictions on an employee’s use of the vehicle.  The case involved a fatal motor vehicle accident that occurred while an employee was driving a pick-up truck owned by the employer.  The employer had instructed the employee to deliver lunch to a co-worker during working hours and thereby had authorized the employee to use the vehicle for the trip.  The insurer, Pioneer State Mutual, denied liability coverage to the employee for the wrongful death claim arising out of the accident.  Although the Pioneer State Mutual policy would cover employees driving vehicles that they did not own, the policy excluded coverage for any vehicle that was furnished or available for the employees’ regular use.

The trial court found that the employee needed permission to drive the vehicle and was not allowed to drive the vehicle in an off-duty status.  The employee did not have his own set of keys to the vehicle.  Under those facts, the Court held that the employer had imposed restrictions on the employee’s use of the pick-up truck and therefore the regular use exclusion did not apply.  The North Dakota Supreme Court agreed.  The Supreme Court found that the question of whether a vehicle has been provided for regular use is a question of fact.  Previously the Court had ruled that reasonable time and place restrictions on the use of a vehicle could lead to a finding that the vehicle was not furnished for a person’s regular use.  Based on the factual record, the Court affirmed the trial court ruling.