Omnibus Clause Pertains

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Another exception to the omnibus clause pertains, under Coverage B, to any partner or employee with respect to injury to or destruction of property owned by, rented to, in charge of or transported by the named insured.
We have just seen that employees are additional insured while driving automobiles owned by the garage or by customers. For example, if a garage employee, while driving an agency car, involves it in an accident with a third-party car, the employee would be insured under coverage B against actions brought by the third party for damages. However, if because of the same accident the garage wanted to make a claim against its employee for the damage he had caused to the agency car, the latter would not be covered under the GLP as an additional insured. Coverage in such a case would in effect convert a liability policy into a physical damage policy.
Contractual Liability
As with the BAP, and for similar reasons, the GLP excludes “liability assumed by the insured under any contract or agreement. …” However, there is a situation in which this exclusion could defeat coverage already granted the insured under Divisions 1 and 2 of the GLP, and, to prevent such a contradiction, special provision must be made.
A garage risk differs from other risks in that it may be held liable for accidental injuries resulting from defects in the automobiles and parts that it sells and services. For this reason it needs and receives the products liability general car insurance granted in the operations coverage of Divisions 1 and 2. However, products liability may develop in two different ways, and one of these involves a contractual liability.
If the person injured as a result of defective equipment was the purchaser thereof, he might sue the insured garage for damages on the usual grounds of negligence, or he might proceed against it for breach of contract. The second alternative would be based on the allegation that the garage (the seller of the defective equipment) had breached a warranty, either expressed or implied in the sales contract, as to the fitness of the product for the purposes for which it was bought. In the case of an automobile, these purposes would, of course, be safe transportation.
Were the plaintiff to adopt this second basis for his action, the exclusion mentioned above could deprive the insured of his liability protection. To prevent this, the GLP adds to the usual exclusion the saving clause, “. . . except a warranty of goods or products.”
Excluded Automobiles and Other Items. A garage risk may engage in collateral activities with which the insurer does not wish to become involved under the GLP. For example: (l) large wholesale sales agencies may own haul away vehicles used to effect deliveries to retail dealers, an operation that is much more in the nature of a trucking risk than a garage risk. (2) A local garage may rent out cars for hire after the fashion of a public automobile risk. (3) A garage risk may use tank trucks for the delivery of gasoline or fuel oil on a commercial basis, an exposure not contemplated by the rates applicable to the GLP. (4) Garages located near navigable waters may possibly work on marine engines in watercraft. With few exceptions, the GLP does not apply to any of the four items mentioned above “while [they are] away from the premises.” That is, accidents caused by them on the premises would be covered.
Nor does the contract apply to elevators, except as provided under Division 3. That is, if the insured does not purchase general car insurance on elevators under Division 3, he cannot be granted coverage on them under the premises clause of Division 1 or 2.
Livery, Trucking, Aircraft, Alterations
Four other coverage restrictions are grouped together under a third exclusion. They concern: (1) the use of any automobile as a public or livery conveyance, (2) the use of any automobile for carrying property for a charge, (3) aircraft, (4) structural alterations carried out for the named insured by independent contractors. None of these items is rightfully the province of the GLP and should be covered under the forms and rules applicable, respectively, to public automobiles, trucking risks, aircraft, and owners’ protective liability insurance. Get you general car insurance quote Today!


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