Loading and Unloading of Vehicle

A customer was injured on our insured's lumber yard while he was there to purchase some wood. An employee of the lumber yard was loading the wood into the customer's car. The customer was standing behind the car at that time and was not involved in the loading of the wood at all. When the employee had completed the loading of the vehicle, he was closing the hatch of the station wagon when he struck the customer in the head with the hatch of the car.

We are submitting the claim to the insured's CGL carrier, but one of our associates has asked an interesting question: can the employee be considered an insured under the customer's personal auto policy since he was “using” the covered auto at the time of the accident? The auto policy does not define “using,” but other insurance policies consider loading and unloading to be use of a vehicle. Can the employee be an insured under the customer's auto policy and so, find liability coverage there for the injury?

Pennsylvania Subscriber

Your theory for liability coverage under the claimant's auto policy is interesting and logical. The insurer should not dismiss your argument out of hand.

You are looking at the scenario from the viewpoint of the lumber company's employee; however, “use” of an auto does include loading and unloading. Now, we can see that being more readily approved by an insurer if the loading and unloading were being done by the auto owner, the named insured; this is especially true since the named insured is an insured also for the ownership of the auto. The insurer can feel secure in agreeing to coverage for the named insured for liability arising out of a loading or unloading incident mainly because of the ownership aspect and not rely so much on the use aspect.

In this case, you are claiming that someone other than the owner is an insured due to use of the auto through loading and unloading. The insurer may disagree, but since insurance policies such as the CGL form admit that use of an auto includes loading or unloading, and since a business auto policy clearly would cover injury arising out of the moving of property from or into a covered auto, we agree with your argument. As we noted above, your argument is logical and reasonable. This leads to an ambiguity in the policy language and therefore, your insured should get the benefit of the doubt.

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