Insurer required to defend trucking company in fatal crash lawsuit

By Mark Schremmer, Land Line staff writer | 7/12/2017

A Missouri federal judge ruled on July 10 that an insurance company must defend a trucking company in a separate lawsuit involving a deceased trucker. The insurer argued that it wasn’t obligated to defend or indemnify because the deceased was an employee of the trucking company.

However, U.S. District Judge E. Richard Webber ruled that Spirit Commercial Auto Risk Retention Group was required to defend Kailey Truck Line because Gurpreet Kailey, who died in an April 2014 crash while on-duty, was an independent contractor and not an employee. The auto liability insurance policy excluded coverage for bodily injury to employees.

In the underlying lawsuit Lisa Vazquez-Kailey, the wife of the deceased, filed claims in 2015 against Kailey Truck Line owner Mike Kailey and Vikram Shah, who was the driver during the fatal crash. Gurpreet Kailey was a passenger in the sleeper berth at the time of the crash.

Kailey Truck Line hauls vegetables from California to New York and household goods from the East Coast to California. Gurpreet Kailey and Shah regularly drove as a team.

Gurpreet Kailey and Shah did not receive any paid leave from Kailey Truck Line, and they were paid by the trip. They were also allowed to work for other companies when not working for Kailey Truck Line.

Spirit argued the drivers were employees because they could be fined for leaving an assigned area, they were required to notify Kailey in advance if the wanted to take time off, and they were required to provide two weeks’ notice upon termination of the contract.

“The Court finds the factors weigh in favor of drivers being independent contractors,” Webber wrote. “Particularly persuasive are the facts drivers were paid per trip and were permitted to work for other companies. Because the court finds drivers and the decedent were independent contractors, the decedent’s injuries do not qualify under the employee exclusion of the policy. Therefore, the general coverage clause of the policy applies, and Spirit has a duty to defend and indemnify Kailey in the underlying suit.”

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