Indiana court limits TLC coverage in crash

An Indiana appeals court ruled that additional insured coverage ends at vicarious liability in a fatal trucking crash case. On Oct. 16, the Court of Appeals of Indiana decided Transport Leasing/Contract Inc. must bear responsibility for direct negligence claims without insurance protection from Northland Insurance Company. The 2019 accident killed Alanna Koons and her twin daughters when driver Bruce Pollard, assigned by TLC to Weston Transportation, caused the collision.

TLC held additional insured status under Weston’s $1 million Northland policy, but coverage applied solely to liability stemming from another insured party’s conduct. Northland paid its policy maximum to settle Weston claims, yet refused to cover allegations that TLC failed to properly screen Pollard before hiring. TLC paid $2.45 million to the Koons estate and $250,000 to other victims, then sued Northland for breach of contract.

The trial court sided with Northland, finding policy language restricted TLC’s coverage to vicarious liability. The appeals court affirmed, noting the Exclusive Services Agreement also barred indemnification for damages from TLC’s negligent employee referrals. Judges found no bad faith by Northland and confirmed insurers need not defend additional insureds against direct negligence accusations unless policies explicitly state otherwise.