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Company’s Insurance Fails to Cover Truck Driver In Off-Hours Accident

Whether someone is working at the time of an accident can be difficult to tell, and it affects which insurance coverage applies. Harry T. Kemp was an independent contractor driving a Peterbilt tractor pulling a 50-foot flatbed trailer when the truck collided with an automobile driven by Lewis Jurey in East Baton Rouge Parish. Kemp had picked up his trailer from Baker Metal Works, which had completed repairs on the trailer. The Louisiana Court of Appeal decided 2-1 in Jurey v. Kemp (La. Ct. App. 1 Cir. 9/20/11) that Kemp was not working when the accident occurred. That affected which insurance policy covered the injuries received by Jurey and his two passengers.

Independent contractors with trucking companies may be covered by the company’s insurance when the driver is performing transportation services. When the independent contractor is not, non-trucking liability, or “bobtail,” insurance is needed to fill a gap in coverage. Liberty Mutual Fire Insurance Co. insured Dallas & Mavis Specialized Carrier Co., LLC (D&M), which had hired Kemp as an independent contractor. The Nineteenth Judicial District Court agreed with Liberty Mutual that the policy did not cover Kemp because he was “on his own time.” Instead, Kemp’s bobtail coverage from Great American Insurance Co. should cover the accident.

D&M’s policy would insure the accident only if the semi-tractor, leased to D&M, was being used for business purposes when the accident occurred. The reason for Kemp’s trip was decisive to determine coverage. Kemp’s lease with D&M required Kemp to “maintain the Equipment in proper operating condition and in full compliance with applicable government regulations.” On January 17, 2008, Kemp was picking up the trailer to make room at the Baker Metal Works. Kemp had requested the metal works replace some of the trailer’s decking boards and weld a door to make it easier to reach the wiring for lights and air lines for brakes. D&M did not request this work and did not know about it. Kemp did not ask for reimbursement, and D&M did not pay him for the trip. Nor was Kemp performing any transportation services for D&M or on standby.

Previous cases have established the outlines for when an independent truck driver is working. Driving home after a delivery is personal because it is after work has ended. When the company asks its independent contractor to remain in an area to pick up a load, the driver is working. Similarly, driving to a distant motel at night for rest to be ready to haul a load is work related.

Whether Kemp was on business depended on whether the lease with D&M required these repairs. Neither D&M nor Department of Transportation regulations required the repairs on the decking boards or creation of a door accessing the trailer’s wiring and air hoses. It would be different if regulations explicitly required these repairs. Instead, the repairs were for Kemp’s convenience. Because D&M did not require the repairs, it was not work related and D&M’s insurance policy did not cover him. Kemp’s bobtail policy was the appropriate insurer for the accident.

Judge Jewel E. “Duke” Welch disagreed. By his reasoning, the lease gave D&M “exclusive possession, control, and use of the leased motor vehicle for the duration of the lease agreement.” He interpreted “use ‘for’ D&M whenever that use furthered D&M’s business interests and was not a purely personal use of the covered vehicle by Kemp.” This may be a broader standard than previous cases allowed. The repairs may have made work easier for Kemp, but they also may have served D&M’s business interests. Kemp was maintaining the leased equipment for trucking-related purposes. Under the lease, he was obligated to maintain the trailer and make sure it passed periodic safety inspections. Kemp did not get reimbursed by D&M for any maintenance work because maintenance was his responsibility. Judge Welch would have reversed the district court.

Independent contractors are common in today’s flexible business world. In these business relationships, the line between work and free time is hazier than with traditional employment. More factors need to be taken into account. A lawyer skilled in determining potential liability will be able to distinguish the boundary between the individual’s and the company’s liability and which insurance policy should pay.

If you have been harmed by the acts of another, call the Berniard Law Firm toll free at 1-866-574-8005 and speak with a lawyer who can help you get the recovery you deserve.