IS CGL INSURER LIABLE FOR AUTO ACCIDENT INJURY?

Commercial General Liability	Automobile Exclusion
Uninsured Motorists Coverage	Occupying The Vehicle

Frank Gaidosh, a construction site employee, was assigned the duty of accepting delivery of stone being delivered to a work site. When David Whitfield arrived at the site, Gaidosh rode in the truck with him to show him exactly where to dump the stone. Upon arriving at the delivery spot, Gaidosh offered to direct Whitfield as he maneuvered the truck to dump the stone.

Gaidosh exited the vehicle but did not put on the reflective vest and nor take a flashlight that were in the truck. The delivery spot was on the south side of a public roadway. Whitfield turned the truck sideways as Gaidosh made sure that southbound traffic was stopped. At that point, a car approaching on the other side of the street struck and seriously injured Gaidosh.

Whitfield was an employee of Bogey's Trucking & Paving, Inc. (Bogey's). Bogey's had a business automobile policy issued by ARI Insurance Companies (ARI), as well as a comprehensive general liability policy issued by Indian Harbor Insurance Company (Indian Harbor). When Gaidosh sued Bogey's and Whitfield, the trial court determined that ARI was obligated to defend and indemnify Bogey's and that it must also provide uninsured motorist coverage to Gaidosh. ARI appealed.

On appeal, ARI did not dispute its obligation to defend and indemnify Bogey's and Whitfield. However, it did claim that Indian Harbor should share in that obligation and that it should not be required to provide uninsured motorists coverage to Gaidosh.

In evaluating the Indian Harbor policy language, the appellate court , noted the automobile exclusion’s phrase "arising out of" meant "originating from" or "growing out of" the use of the automobile. It found that the injury to Gaidosh grew out of the use of the automobile. As a result, the court affirmed the trial court's decision that the Indian Harbor policy's language excluded coverage for the Gaidosh lawsuit.

The appellate court also agreed with the trial court's decision that ARI was required to provide uninsured motorists coverage. ARI argued that Gaidosh was not "occupying" a covered "auto" because he was not in the truck at the time, he was injured but the court found that Gaidosh was in fact "occupying" the vehicle within the meaning of the policy because he had been a passenger and had been out of the truck for only a few seconds before he was struck and injured. Under these circumstances, the court felt he was entitled to uninsured motorists coverage under the ARI policy.

The lower court's decision requiring ARI to defend and indemnify Bogey's as well as to provide uninsured motorists coverage to Gaidosh was affirmed.

Bogey's Trucking & Paving, Inc. vs. Indian Harbor Insurance Co.-Superior Court of New Jersey Appellate Division-July 19, 2007-928 Atlantic Reporter 2d 96