Qualification and Experience Requirements of High Risk Property Insurance Policies | Property Insurance Coverage Law Blog


Specialized and high-risk insurance policies, like marine, aviation, and trucking, typically comprise necessities for {qualifications} and expertise of the operator. These are sometimes essential elements establishing protection, that are raised after a loss happens. These insurance policies aren’t one-size-fits-all; they’re tailor-made to particular dangers and require operators to satisfy sure standards to make sure that they’re able to managing these dangers successfully. For instance, an aviation coverage may stipulate that the pilot should have a sure variety of years and flying hours of expertise, in addition to particular certifications. Failing to satisfy these necessities may void the protection, leaving the policyholder uncovered to important monetary dangers.  

A current ruling on this subject1 was conversational however to the purpose:         

SYNY Logistics, Inc., a big interstate trucking firm, purchased an insurance coverage coverage from Great Lakes Insurance SE. The coverage lined drivers as they hauled freight throughout the nation. But the coverage didn’t cowl anybody and everybody who acquired within the cab and acquired behind the wheel. The coverage required drivers to have one 12 months of driving expertise.

One day, Brent Granville, a driver for the corporate, hopped into his huge rig with a set of keys. He began the engine and went trucking with 354 days of expertise below his belt. That’s near a 12 months of expertise, however it’s not a 12 months. Unfortunately, he crashed.

The accident sparked a dispute between the trucking firm and the insurance coverage firm. SYNY later filed this declaratory judgment motion, looking for protection for the accident. Great Lakes, in flip, filed a counterclaim concerning the lack of protection. The insurance coverage firm then moved for abstract judgment, arguing that there is no such thing as a protection as a result of the driving force didn’t have the expertise required by the coverage.

The Court grants Great Lakes’s movement. When it involves protection, the coverage isn’t in for a penny, in for a pound. It’s miss by an inch, miss by a mile. Granville acquired 97% of the way in which towards satisfying the one-year requirement. So, he’s 100% quick and is entitled to 0% protection.

The decide analyzed the coverage and made this commentary:

The endorsement declared that Great Lakes wouldn’t indemnify SYNY for harm except an ‘experience[d]’ driver operated the automobile. …The driver should ‘have’ a sure degree of expertise. Id. Specifically, the driving force should present ‘documented evidence’ displaying that he ‘ha[s]’ the required expertise ‘at the inception of th[e] Policy or at the date of hire, whichever is the later.’

The events agree on the related dates. SYNY employed Granville on April 19, 2020. …The coverage began on August 24, 2020. August 2020 got here after April 2020. The coverage begin date is the later date. So the query is whether or not Granville had ‘a minimum of one (1) years continuous driving experience, within twenty-four (24) months of’ August 24, 2020….

Granville didn’t. Granville obtained his business license on September 5, 2019….The coverage began 354 days later. He was solely 9 days away from hitting the 365-day mark. He acquired 354 toes towards the 365-foot end line.

That’s shut, however no cigar. Granville fell in need of notching one 12 months of driving expertise below his belt. So the coverage didn’t cowl Granville. For need of 9 days, the protection was misplaced.

The expertise requirement is sensible. After all, Great Lakes was insuring heavy gear that might trigger a number of harm to lots of people. So, earlier than signing up for that potential legal responsibility, Great Lakes wished to guarantee that the folks doing the driving knew what they have been doing.

“That’s close, but no cigar” is one thing you could hear me say in a speech. I don’t imagine I’ve ever learn a federal decide’s opinion with this phrase.

The decide famous that the policyholder might have been in a position to make a waiver or estoppel argument to keep away from the opposed ruling, however its attorneys didn’t make it:

SYNY states that ‘prior to the issuance of the Policy,’ and throughout the utility course of, SYNY Logistics supplied Great Lakes with a listing of drivers. The listing included Granville. But Great Lakes by no means ‘informed’ SYNY that Granville was not certified. Instead, Great Lakes ‘invoiced’ SYNY for premiums.

Maybe SYNY is hinting at a waiver or estoppel argument. Great Lakes anticipated the argument in its opening temporary. But information dumped into a quick don’t make a authorized argument. An estoppel or waiver argument ought to – on the very least – use the phrases ‘estoppel’ or ‘waiver.’ SYNY’s temporary has none.

This Court is not going to construct the argument for the events. SYNY has waived its waiver and estoppel arguments. See Cent. States, Se. & Sw. Areas Pension Fund v. Midwest Motor Express, Inc., 181 F.3d 799, 808 (seventh Cir. 1999) (‘Arguments not developed in any meaningful way are waived.’);…

Federal Judge Steven C. Seeger made this ruling. He is vibrant, pretty new to the bench, and positively properly certified:

Seeger earned his Bachelor of Arts, summa cum laude, from Wheaton College and his Juris Doctor, magna cum laude, from the University of Michigan Law School, the place he was inducted into the Order of the Coif and served as each an affiliate and articles editor of the University of Michigan Law Review.

After commencement from legislation college he served as a legislation clerk to Judge David B. Sentelle of the United States Court of Appeals for the District of Columbia Circuit. After his clerkship, Seeger practiced for twelve years within the Chicago, Illinois, workplace of Kirkland & Ellis, the place he spent his final seven years as a companion. From 2010 to 2019, Seeger served as Senior Trial Counsel within the Chicago Regional Office of the United States Securities and Exchange Commission, the place he litigated circumstances to implement federal securities legal guidelines on behalf of the general public.  

Certainly, the concept the brightest minds and most expert attorneys ought to function judges is a compelling one. The judiciary performs a essential position in decoding legal guidelines and delivering justice, and having extremely certified people in these positions can considerably influence the standard of rulings. This is particularly true in specialised areas of legislation, reminiscent of insurance coverage protection, the place the complexity of the problems calls for a nuanced understanding.

The takeaways from this publish are:

  1. When coping with specialised property insurance policies concerning excessive dangers, rigorously verify for {qualifications} and expertise necessities.
  2. If the insurance coverage firm is aware of the qualification and expertise degree aren’t met on the level of utility, make a waiver or estoppel argument.
  3. Insurance legislation opinions don’t have to be nerdy and boring explanations.
  4. We have to encourage and reward the very best and brightest to just accept essential public service positions.  

Thought For The Day        

More essential than your obligation to observe your conscience is your obligation to kind your conscience appropriately.

—Antonin Scalia

1 SYNY Logistics v. Great Lakes Ins., No. 22-cv-764 (N.D. Ill Sept. 30, 2023).


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