The Tennessee Court of Appeals recently reviewed a decision involving uninsured motorist coverage for an employee in a car accident case. In Skarbrevik v. Pers. Representative of Estate of Brown, (Tenn. Ct. App. Nov. 16, 2015), the plaintiff was driving a vehicle owned by his wife while conducting company business for his Texas employer. He was injured in a car accident in Tennessee with another motorist who did not have insurance. The plaintiff sought to recover for his injuries through the uninsured motorist provision of his employer’s business automobile policy. The insurer denied coverage, arguing that the policy only covered vehicles owed by the employer. The trial court, however, disagreed with the insurer and granted summary judgment in favor of the plaintiff. The insurer appealed that decision to the Tennessee Court of Appeals, which ultimately affirmed the judgment of the trial court.
Generally, insurance contracts are subject to the same rules of construction and enforcement as any other contract. In the absence of fraud or mistake, they are interpreted as written, and their terms are given their natural and ordinary meaning. Since insurers are strictly accountable for the language in their contracts, ambiguous language is construed against the insurer and in favor of the insured.
In Skarbrevik, the company insurance policy included an endorsement that added employees on company business using non-company vehicles to the liability coverage. As a result, an employee of the company became insured under the policy when using a covered vehicle during company business, regardless of whether the company owned that vehicle. Considering the business policy and endorsements, and giving effect to the rules of contract interpretation, the appeals court found that uninsured coverage was available to the plaintiff under the policy.
Since the policy was issued in Texas, and the plaintiff’s vehicle was garaged and registered in Texas, the court applied Tex. Ins. Code Ann. § 1952.101. Under the statute, an automobile liability insurance policy must provide uninsured motorist coverage that protects insureds who are legally entitled to recover compensation from owners or operators of uninsured motor vehicles. Since the plaintiff was covered as an insured under the employer’s policy for liability purposes, the court held that the plaintiff was also entitled to the uninsured motorist coverage imposed by the statute. The court further explained that adopting the insurer’s argument that the endorsement did not expand uninsured coverage would be contrary to the statute, as well as public policy. As a result, the court of appeals affirmed the judgment of the trial court, holding that the plaintiff was entitled to uninsured motorist coverage for his injuries.
The Nashville injury attorneys at Martin Heller Potempa & Sheppard assist victims of motor vehicle collisions and other accidents in pursuing compensation from the negligent parties who caused their injuries. We offer clients personalized attention and aggressive representation. To discuss your personal injury, estate, or family law matter with one of our skilled attorneys, contact our offices at (615) 800-7096 or online.