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Who Is Insured, What Is Insured and Why Makes a Difference

December 12, 2017

What do the Moody Blues and an insurance policy have in common? It boils down to this:

Say what you mean and mean what you say.

The District Court of South Carolina recently reminded us of the importance of the terms of an insurance policy; it means what it says. Trustgard Insurance Company v. Michael Brown, individually and d/b/a Triple S Transport, et al. 2017 WL 5991866 (December 4, 2017).

This matter was before the court on Trustgard’s motion for summary judgment, seeking a determination it had no obligation to provide coverage where neither the insured vehicle nor the insured were involved in an underlying accident. Trustgard issued a policy to Michael Brown providing coverage for only one vehicle – a Ford Car Carrier and for only one driver – Brown. That policy was in effect at the time of the underlying accident in which a driver rear ended a car trailer being towed by a different vehicle, operated by a different driver. The only link to Brown was the display of Brown’s Interstate Commerce Commission Motor Carrier number on the rear ended vehicle.

Brown’s policy provided, in pertinent part, coverage for damage “…caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.’" Brown’s vehicle was not involved in the underlying accident. His policy also provided no one is an insured unless they are operating a covered auto. Looking at the circumstances in light of the language of the policy, the court succinctly concluded there was no insured vehicle and no insured driver in the underlying accident. As a result, Trustgard had no obligation to defend or indemnify.

The claimant in the underlying action did not stop at the auto policy itself, but argued in favor of coverage pursuant to the MCS-90 endorsement to Brown’s policy. The federal policy behind the MCS-90 is to protect members of the public by ensuring they can recover up to the required level of coverage for vehicles operating under a motor carrier’s authority. The endorsement applies even if the vehicle in the accident is not an insured auto under the policy issued to the motor carrier. However, the endorsement is triggered only when the underlying policy does not provide coverage and either: there is no other policy available to satisfy a judgment against the motor carrier or the motor carrier’s coverage is insufficient to meet the federally mandated minimum level. Because the vehicle in the underlying accident had coverage sufficient to satisfy the federal regulations for a vehicle of its type, the public policy behind MCS-90 was satisfied. And, significantly, the court refused to construe the MCS-90 as coverage that can be stacked on top of sufficient liability coverage. As a result, Trustgard’s motion for summary judgment was granted.

Maybe not quite the Moody Blues, but the court continues to approach coverage issues by reading and analyzing the language of the policy. As previously addressed here, the terms of a policy will be given their exact meaning, absent the violation of public policy or statutory prohibition.


Cheryl D. Shoun is a trial attorney and certified mediator whose experience includes construction law, insurance defense, personal injury defense, employment litigation and medical malpractice. As a frequent writer, she serves as editor for Nexsen Pruet's TIPS: Torts, Insurance and Products Blog.

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