Sadly, a simple administrative error, failure to follow-through and a short review of insurance would have easily avoided a huge liability for a business.
United Emergency owned a fleet of ambulances. One of its ambulances crashed into Mr. Stofko and killed him. The lawsuit following Mr. Stofko’s death demanded significant damages. (Markel Ins. Co. v Rau, 7th Cir. 2020).
The ambulance that crashed, Ford #4497, was not listed on United’s insurance policy. Shortly before the crash, however, United sent its insurance agent an email instructing the agent to add the Ford #4497 to the policy.
The policy stated that United “is authorized to make changes in the terms of the policy” with the insurance company’s consent.
That should be the end of the matter – but United failed to get the insurance company’s consent. Here, United did not follow through.
The Court noted that it was undisputed that the insurance company did not accept nor respond to United’s Email. Thus, the Ford #4497 was not covered.
A simple, short review of existing insurance would have easily avoided United’s problem. Many businesses assume that adding and removing vehicles from a fleet insurance policy is a matter of routine – and it should be.
We have successfully counseled businesses on avoiding insurance disputes. (Of interest in COVID may be our article Stilp, Thomas R. “For COVID-19? Four Types of Business Insurance Options for Business Owners,” Contractors Supply Magazine, pp. 50-53 (June 2020). )
If you have not reviewed your company’s insurance in a while, waiting can be very costly. Give us a call –