Maryland Court Affirms Named Driver Exclusion in Commercial Auto Policies

June 5, 2006

On June 1, 2006 the Maryland Court of Appeals issued its decision in Harleysville Mutual Insurance Co. v. Zelinski, declaring that an insurance company “named driver exclusion” applies to a commercial automobile policy.

“Insurers operating and writing business in Maryland can go forward knowing a named driver exclusion in a commercial policy is valid” said Robert J. Hurns, counsel for the Property Casualty Insurers Association of America (PCI), which filed an amicus brief in the case. “Clearly, the legislature did not intend to remove this type of endorsement from commercial policies, and the appellate court has recognized that.”

Angela Zelinski and her young son were injured when their car was struck by a truck, negligently driven by Robert Townsend III. The truck was owned by an unincorporated entity owned and operated by Townsend’s parents, and was one of several vehicles insured under two insurance policies – a commercial automobile liability policy and an umbrella policy with Harleysville Mutual Insurance Company. Townsend’s father had accepted a named driver exclusion for this coverage, which removed Harleysville from any liability for accidents caused by Robert Townsend III.

At trial, Harleysville based its motion to dismiss upon the fact that the named driver exclusion did not require them to pay damages to the Zelinskis. The trial court agreed with Harleysville, and the Zelinskis appealed.

On appeal, the question was whether the endorsement was contrary to Maryland law. The Appellate Court held the named driver exclusion was allowed in commercial policies by statute, and that the endorsement served to provide coverage to households that may be precluded from coverage due to the record of a single driver. In essence, the endorsement was not inconsistent with or prohibited by Maryland law, and therefore was valid.

Source: PCI

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