Stoms v. Federated Serv. Ins. Co., 2015 Del. LEXIS 551 (Del. Oct. 20, 2015)

An automobile policy that limits uninsured motorist coverage to certain classes of employees is not ambiguous and not contrary to public policy.

The plaintiff was killed by an uninsured driver while driving a car belonging to his employer. The employer’s automobile insurance policy included personal injury protection (PIP) coverage for all drivers, in addition to uninsured motorists (UM) coverage, for only a limited class of drivers. That limited class included only “directors, officers, partners or owners” of the company. The insurer paid the plaintiff the entire PIP coverage, but since the plaintiff was employed as a “finance manager,” the insurer denied the plaintiff UM benefits since the plaintiff was not in the designated class. The Delaware Supreme Court found nothing improper under Delaware’s insurance statutes about an employer providing greater optional insurance coverage to certain employees. The Delaware Supreme Court also found no ambiguity in the definition of the limited class, stating that it is clear that “director” and “officer” refer to those terms as used in corporate law and, therefore, there was no plausible way that the contract terms can be said to encompass the plaintiff’s position as a “finance manager.”

Case Law Alerts, 1st Quarter, January 2016

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