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Business Auto Policy Doesn't Always Cover Family Members' Injuries or Death

The personal  representative of a deceased 17 year old lost a court bid to compel the insurance company providing UM/UIM auto coverage to her father's business vehicles to cover any judgment deficiency obtained as a result of her death while a passenger on her stepfather's motorcycle. A Prince William Circuit Court judge ruled that the Erie Insurance Company policy did not afford such coverage to the owner's daughter, though it did provide such coverage on the owner and his spouse. Following are the facts, and the ratioanle for the decision.

In early 2002, Simpson Unlimited, Inc. ("Simpson Unlimited"), a company specializing
in roof replacement and restoration, was seeking proposals for a new insurance policy for its fleet
of vehicles. Simpson Unlimited's Comptroller (later "Chief Financial Officer"), James Dooley,
was responsible for obtaining the new insurance policy.  Dooley worked through an insurance agent, Mr. Sullivan, to obtain policy quotes for the company. Sullivan subsequently contacted the "quote unit" at Erie Insurance Exchange ("Erie"). After the quote unit provided Mr. Sullivan with the premium charges for the various vehicle coverages that Simpson Unlimited requested, Mr. Sullivan prepared a specific coverage proposal, which Mr. Dooley accepted on behalf of Simpson Unlimited.

 Mr. Dooley, as Chief Financial Officer, signed the agreement on the signature line, which contained the word "Subscriber." Mr. Sullivan completed a Commercial Automobile Supplemental Questions form, which stated that at least one of the corporate officers or partners of Simpson Unlimited drove a company vehicle for personal use and did not have a personal auto insurance policy. The Erie Pioneer Business Policy and Declarations were printed on June 3, 2002, and Mr. Sullivan met with Mr. Dooley a few weeks later to review the policy.

The Simpson Unlimited insurance proposal included a "drive other car endorsement"
(a/ka "Drive Other Car Coverage"), which was built into the Erie contract through its "Policy
Change Endorsement (Virginia only)." The Policy Change Endorsement provided that Simpson
Unlimited's "active executive officer and spouse" were covered with ("Uninsured/Underinsured
Motorist") UM/UIM coverage, but made no mention of the active executive officer's family
members. The UM/UIM had the Virginia-mandated UMLTIM endorsement in a form approved
the State Corporation Commission. Va. Code Ann. $5 38.2-3 17, -2206.

On July 20, 2003, Jessica Ashley Dudley, the minor daughter of Greg Simpson, died as a
result of a motorcycle/motor vehicle accident. She was the passenger on a motorcycle operated
by her stepfather. Miss Dudley and her stepfather were traveling on a social call. When she
died, Miss Dudley was seventeen years old, and she was not an employee of Simpson Unlimited.
About nine months later, Mr. Simpson filed a UIM claim with Erie on behalf of his daughter's
estate. This claim was denied by Erie.

The lawsuit sought a declaratory judgment that Erie was obligated to provide underinsured
motorist coverage to the estate of Miss Dudley. The Plaintiff contended that the UM/UIM endorsement, stating that "anyone we protect" includes "you, or any family member," provides coverage to Mr. Simpson and his family. The Court disagreed with this contention. Reading the policy as a whole, the Court held that the "you" in the UM/UIM endorsement meant the named insured, Simpson Unlimited, and not Mr. Simpson persoanlly.

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