Q
Our insured is a real estate developer and general contractor. He hired an independent contractor to move earth from the insured's premises to another area. Shortly after, our insured was sued as a codefendant for alleged damages to a third party, who claimed that his vehicle fell into a hole in the road. The basis of the claim is that our insured allowed the contractor to overload the truck with earth from his premises, and in turn the independent contractor caused the road to be damaged because he overloaded the truck.
We submitted the claim to the general liability carrier and it agreed to defend our insured but with a reservation of rights; the carrier said the claim should be handled by the business auto insurer. When we submitted the claim to the auto insurer, it also agreed to defend with a reservation of rights; the auto insurer said the claim was a general liability claim.
The auto insurer is not the same as the general liability insurer and we do not want our insured to be left without coverage in this instance. Which insurance policy would cover this claim? The auto policy has symbols 7, 8, and 9.
Ohio Subscriber
A
We believe that the coverage for the claim against the insured should come from the general liability carrier.
You stated that the allegation against the insured is that he allowed the contractor to overload the truck and that caused the road to be damaged. This is basically a claim of negligent supervision against the insured and there is no exclusion that would apply. The insurer may believe that the auto exclusion applies, but that exclusion is for autos owned, operated by, rented or loaned to any insured. Your insured does not fit that category. He did not rent or lease a truck; he contracted with an earth mover to move dirt. So, unless the contractor was an insured under your insured's CGL form, there is no relevant exclusion that would apply to this claim.
As for the auto policy, the only symbol that might apply in this instance is symbol 9, nonowned autos. Symbol 8, the hired autos symbol, is not relevant because the insured did not lease or hire or rent an auto. The nonowned auto coverage is for such autos that are used in connection with the named insured's business. It does not seem from your description of your insured that that is the case here. However, if the nonowned auto coverage connection can be established, there is no exclusion on the auto form that would apply. The auto insurance would be excess over any other collectible insurance.
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