Md. Court Upholds Fellow Employee Exclusion in Commercial Auto Policy

The Maryland Court of Appeals has held that a fellow-employee exclusion in a commercial automobile liability policy is valid and enforceable above the minimum statutory liability limits.

The court found that a business auto insurance policy that contains a fellow employee exclusion is invalid to the extent that it provides less than the minimum statutory liability coverage; however the exclusion is valid and enforceable as to coverage above the minimum statutory
liability limits of Maryland’s compulsory automobile insurance law.

“The exclusion, as it operates for amounts greater than the mandatory minimum coverages for bodily injuries in this case, neither violates the
law of contracts nor Maryland’s compulsory automobile insurance law,” the court said in its opinion in the case of Wilson v. Nationwide Mutual Insurance Co. The ruling upheld the Court of Special Appeals which had reversed a Circuit Court for Carroll County’s decision that the exclusion was invalid.

Wilson sought a declaratory judgment invalidating the exclusion of liability coverage for his injuries he sustained while a passenger in a vehicle driven by the fellow employee.

Insurers welcomed the ruling.

“In light of this decision, insurers know that an exclusion that applies only to coverage above the minimum liability limits of Maryland’s compulsory insurance law is valid and enforceable” said Robert J. Hurns, counsel for the Property Casualty Insurers Association of America (PCI), which filed an amicus brief in the case.