Illinois Truck Accident Insurance Coverage Clarified By Illinois Supreme Court

The final chapter of a long debate regarding whether the Illinois Vehicle Code's "omnibus coverage" applies to commercial truckers was recently decided upon by the Illinois Supreme Court. The Court's held in Zurich American Inc. Co. v. Key Cartage, Inc., No. 107472 (Oct 29, 2009) that Illinois commercial vehicles are covered under the Illinois Commercial Transportation Law, a statute governing commercial vehicles, and not the Illinois Vehicle Code. Therefore the omnibus coverage clause under the Illinois Vehicle Code does not apply to commercial vehicle insurance.

The Illinois Supreme Courts decision overturned the Illinois Appellate Court's previous decision in the Illinois trucking accident case which asserted that the Illinois Vehicle Code did in fact apply to commercial vehicles.

In Zurich, the issue at stake was whether Zurich, a company insuring a trucking company, or West Bend, an insurer covering the leased commercial vehicle, was responsible for providing coverage. The case facts were that Franklin Truck Group, insured by West Bend, had leased a vehicle to Rose Cartage Services, insured by Zurich. Rose Cartage loaned this vehicle out to an affiliated company, Key Cartage. One of Key Cartage's drivers was operating this truck when he was involved in an Illinois truck accident that left one dead.

Zurich's insurance policy had a reciprocal coverage provision that stated that they would only cover Rose Cartage employees and that they would not extend coverage to anyone using the truck with expressed or implied interest if that person did not also insure the vehicle's owner. In response, West Bend contended that this reciprocal coverage clause violated the Illinois Vehicle Code that requires insurance companies to provide "omnibus coverage", i.e. coverage to any driver that has the expressed or implied permission of the insured to use the vehicle.