The "Business Use" Exclusion

Andrew Finn recently obtained a successful result in a case of first impression in the Michigan Supreme Court interpreting the “Business Use” exclusion contained in a non-trucking use insurance policy. Hunt v Drielick, Docket Nos. 146433-35, June 26, 2014. The Supreme Court held that the first clause of the exclusion, which excepted from coverage liability incurred “while a covered auto is used to carry property” means that the auto must actually be hauling property, rather than bobtailing (driving without a trailer attached) on its way to pick up a load. The Court remanded the case to the trial court for further findings concerning the second clause of the exclusion; specifically, whether the owner of the tractor had entered into a lease with a motor carrier and, if so, whether the tractor was being used in the business of the motor carrier at the time of the accident at issue.

This case arises from a January 1996 motor vehicle accident involving a truck that was bobtailing on its way to pick up a load from a motor carrier. It had previously been leased to another motor carrier under a long term written lease. The plaintiffs were injured in the accident and two motor carriers settled their claims, taking an assignment of all claims against the insurer that insured against non-trucking use liability. The case had twice been to the Court of Appeals before the Supreme Court granted leave to appeal, resulting in the recent opinion.

Michigan Supreme Court-Hunt v. Drielick