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Judge Says Insurer Not Liable for Drunk Driver’s Accident

A federal judge in Augusta recently issued an interesting decision regarding an insurer’s liability for an accident allegedly caused by a drunk driver. The driver was driving his employer’s vehicle off-hours, and the insurer argued it was therefore not required to provide coverage under the employer’s policy.

Great American Alliance Insurance Company v. Hensley

This case arose from a 2012 accident between a truck and a motorcycle. The driver of the truck had consumed “at least four beers” prior to the accident, according to court records. The truck itself belonged to the driver’s employer. The employer had permitted the driver to use the truck for personal matters, and at the time of the accident he was not performing any work-related activity.

The employer’s umbrella business insurance policy incorporated a lengthy “substance abuse policy,” which basically said no employee could work while “under the influence of alcohol or non-prescription drugs.” The policy specifically stated an “impaired” employee could not drive any company-owned vehicle. And of relevance here is the fact that the umbrella policy only covered employees who drove company vehicles “with permission” of the employer.

In 2013, the driver of the motorcycle sued the driver and his employer in Georgia state court, seeking damages for the injuries he suffered in the accident. Just before that lawsuit was tried earlier this year, the employer’s insurance company filed a separate action in federal court, seeking a declaration of its obligations under the umbrella policy. The key legal question was whether or not the truck driver was an “insured” person at the time of the accident.

In a May 6 decision, U.S. District Judge J. Randal Hall ruled the insurance company was not liable for the motorcycle driver’s claims, as the truck driver was in fact not an insured person. Although the driver had the employer’s permission to use the truck on the day in question, his subsequent decision to operate the vehicle after consuming alcohol—in direct violation of the company’s substance abuse policy—nullified that permission.

Under Georgia law, Judge Hall explained, an insurer may rely on an employer’s express policies governing the use of company vehicles in determining whether an employee is an insured person. The judge noted, “An employer’s actions, oral instructions, rules, or regulations thus define when permission arises and establish the scope of permissive use of its vehicles.” Here, the employer’s policy barred operation of company vehicles while under the influence of alcohol. The employee’s violation of this policy therefore rendered his use of the company’s truck unauthorized.

The motorcycle driver, who opposed the insurance company before Judge Hall, argued the exact language of the policy said an employee may not “work” while under the influence, and since the truck driver here was not working, the exclusion should not apply. In other words, the policy did not cover drunk driving while off the clock. Judge Hall rejected this argument, saying it called for a “technical, word-by-word analysis” of the policy, which is not required under Georgia law. What the law does require is a determination of how a “reasonable person” would interpret and apply the policy. And there was no doubt, the judge said, that the company did not allow its employees to drive its trucks at any time while intoxicated.