AUTO & GENERAL LIABILITY POLICIES TAPPED FOR RECOVERY WHEN FENDER BENDER CAUSES MILLIONS IN DAMAGE TO ELECTRICAL SUBSTATION
- Attorney Kevin Price successfully pursued both auto and general liability policies when working to recover substantial losses resulting from an auto accident that damaged an electrical substation causing a multimillion-dollar loss.
- Mr. Price’s expertise in real estate and property law, specifically regarding easements, helped identify a second theory of recovery, and allowed his client to reach an additional, untapped policy.
Attorney Kevin Price worked with an insurance company to recover losses when a utility company suffered millions in damages following a truck accident that wrecked transformers at a nearby electrical substation. Coverage under the truck’s auto policy was not nearly enough to cover the incurred loss. To help maximize the insurer’s recovery, Mr. Price formed an alternate theory of liability based upon the failure to protect utility poles in the yard. He subrogated against the trucking company’s auto policy for the negligence of its driver, as well as the general liability policy for negligent maintenance of the yard. This combination proved effective, as his client received payments under both policies.
In 2008, a truck driving in the yard of a Northern California cement plant backed into a utility pole and knocked it to the ground. A short circuit caused by the downed pole then damaged two large, expensive transformers located in an adjacent electrical substation, leading to a multimillion-dollar loss.
Attorney Kevin Price worked with the utility company’s insurance carrier to discover the cause of loss and identify options for recovery. The cement truck carried an automobile liability policy of $1 million, which covered only a fraction of the loss. With that in mind, Mr. Price searched for additional insurance coverage. Discovery revealed that the cement company also maintained a $1 million general liability policy for the yard. However, that same policy contained time proven ISO language excluding auto accidents.
Mr. Price developed a theory of liability against the cement company that was independent of the negligent operations of the truck from the original accident. He argued that the company negligently maintained the yard where the pole was located. By identifying damage to other poles in the same yard he showed that trucks and equipment frequently hit the poles, and that the operators of the yard did not protect the poles from impact and abuse.
Utilizing his expertise in property and real estate law, he identified a property easement granted to the utility company to run power lines through the truck yard. Importantly, the easement also established a duty to protect the poles from damage.
By developing a second and independent theory of liability against the trucking company, Mr. Price was able to reach the general liability policy and overcome the ISO auto liability exclusion. This combination was effective, and the insurance company received payments from both policies, helping to reimburse for the substantial loss.
“The trucker’s auto policy was a classic situation of underinsurance,” Mr. Price said. “Through our knowledge of insurance coverage, as well as our investigation of facts and legal/easement documents, we recovered from a second policy that would not normally cover an auto accident. Our expertise in subrogation, combined with our knowledge of property, real estate, and insurance laws and issues, allowed us to pursue a second, less traditional avenue to recoup losses.”