A decision by the Ohio Supreme Court to overturn its own previous ruling on commercial auto insurance coverage has finally corrected an injustice in the legal system, according to the Alliance of American Insurers.
The Court ruled by a 4-3 margin that an employee driving a personal motor vehicle, and not acting in the course of his or her employment at the time of the accident, does not have uninsured motorist coverage under a commercial auto liability policy and an umbrella/excess insurance policy issued by his or her employer.
The case, Scott-Pontzer v. Liberty Mutual. Fire Ins. Co., was originally decided in 1999. The ruling at that time basically extended uninsured and under-insured motorist coverage to any employee whose employer carried commercial auto insurance, regardless of whether the employee was driving a company vehicle while working, or driving his own car on his own time.
A later court ruling based on Scott-Pontzer (Ezawa v. Yasuda Fire & Marine) extended the employer’s coverage to employee family members, compounding the adverse impact of the first ruling. The court also overruled that decision.
“We are pleased that the court has seen the problems created by the earlier ruling,” said Rita Nowak, Ohio regional manager for the Alliance. “In noting that the earlier ruling was wrong and impractical, the court has corrected a grievous error. It has also given insurers new faith in Ohio’s legal system and reassured the business community that the changes in the court’s make-up over the past year have been positive.
“If the earlier decision had stood, the industry would have faced claims of more than $1.5 billion, and the impact on the industry and policyholders would have been chaos.”
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