How lease of truck establishes trucking company’s No-Fault insurance liability to an injured trucker
This blog may get a bit wonky, but if you drive trucks in Michigan and get injured in a tractor trailer crash (and let’s face it, most truck accidents are caused by passenger cars, not the truck driver), it is going to be important. The Michigan Court of Appeals has recently issued a ruling that all self-employed Michigan truckers and Michigan trucking companies must be aware of:
When a self-employed, independent-contractor trucker is injured in a trucking accident, the insurer for the trucking company for whom the trucker was working at the time of the accident must pay for the trucker’s Michigan No-Fault benefits if the trucking company had leased the trucker’s truck.
In Perkovic v. Hudson Insurance Company, et al., the question was whether Zurich American Insurance Company, which insured trucking company E.L. Hollingsworth, was liable to pay for self-employed trucker Dragen Perkovic’s Michigan No-Fault benefits after he was injured in a trucking accident while he “was on dispatch” for Hollingsworth.
In concluding that Zurich was, indeed, liable to pay for Perkovic’s No-Fault benefits, the Court of Appeals noted that, although Perkovic owned the truck he was driving at the time of the accident, Perkovic had leased the truck to Hollingsworth.
Truck lease creates No-Fault liability
Under Michigan’s No-Fault Law, when an employee, while occupying an employer-owned vehicle, is injured in a car or truck accident, “the insurer of the furnished vehicle” is liable to pay for the injured employee’s Michigan No Fault benefits. (MCL 500.3114(3))
In Perkovic’s situation, because he was self-employed and because he owned his truck, the court concluded he was both an “employee” and “an occupant of a motor vehicle owned by [his] employer (himself) …”
As for who the “insurer of the furnished vehicle” was, there were two options:
- Hudson Insurance Company, whose “non-trucking liability” policy on Perkovic’s truck excluded No-Fault coverage for injuries that occurred while the truck was being to leased to a company that provided No-Fault coverage.
- Zurich American Insurance Company, whose policy with Hollingsworth “provided no-fault coverage” that presumably extended to trucks such as Perkovic’s that were being leased by Hollingsworth.
In concluding that Zurich was liable to pay for Perkovic’s No-Fault benefits because Zurich was “the insurer of the furnished vehicle,” the Court of Appeals noted two important facts:
- Zurich was an “insurer” of the furnished vehicle” by virtue of the facts that: (1) Perkovic had leased his truck to Hollingsworth; (2) Zurich provided “no-fault coverage” to Hollingsworth; and (3) Zurich’s coverage of Hollingsworth presumably extended to the vehicle Hollingsworth leased from Perkovic.
- And, as “the insurer of the lessee,” Zurich “provides no-fault coverage,” whereas Hudson, by way of its “lease” exclusion, did not.