Client Alerts
Developer Insured Under Omnibus Clause
December 2009
The Third District of the California Court of Appeal reversed a trial court’s summary judgment that a trucker's insurer owed no duty to defend the developer/general contractor/grading contractor under a vicarious liability theory. Liability insurance policies for commercial motor vehicles typically include an “omnibus clause.” That clause defines an “insured” as one who is vicariously liable for the conduct of a named insured or a permissive user in using or operating the covered vehicle.
The appellate court concluded that such an “omnibus clause” may make a person or entity that is potentially vicariously liable under the peculiar risk doctrine an “insured,” and thereby entitled to a defense pursuant to the insurance policy. Under the peculiar risk doctrine, one may be held vicariously liable if he hires an independent contractor to do work that is likely to create a peculiar risk of harm to others unless special precautions are taken. The alleged peculiar risk arose out of a trucker-pedestrian accident at the lone entrance of a construction site. There was evidence that this intersection entrance required the trucker to make a U-turn (while driving westbound in eastbound lanes), encroach on at least two pedestrian crosswalks, jump a curb, and drive across a sidewalk. This was a peculiar risk sufficient to trigger the omnibus clause.
American States Ins. Co. v. Progressive Cas. Ins. Co., 180 Cal. App. 4th 18, 102 Cal.Rptr.3d 591, (Cal.App. 3rd Dist.,2009)
