Tower Insurance Co. of New York v. Horn

Summary

The Kentucky Supreme Court held that an employee-liability exclusion in an automobile liability policy did not bar coverage for a permissive user who was not the injured employee’s employer. Applying the policy’s severability clause, the court construed the exclusion separately as to each insured and affirmed the Court of Appeals’ reversal of summary judgment denying coverage.

Holdings

1. Horn was an insured because he was using B & B's covered automobile with B & B's permission.
2. The severability clause required the policy's coverage and exclusions to be analyzed separately as to each insured seeking coverage.
3. The employee exclusion did not bar coverage for Horn because Stafford was not Horn's employee, Stafford's injury did not arise from employment by Horn, and Stafford was not performing duties related to Horn's business.
4. Tower owed Horn duties of defense and indemnification under the affirmative coverage provisions because Horn was an insured and the employee exclusion did not apply to him.

Questions Presented

1. Whether Horn qualified as an insured under Tower's automobile liability policy as a permissive user of B & B's covered truck.
2. Whether the policy's employee exclusion barred coverage for Horn when the injured person was an employee of B & B but was not Horn's employee and Horn was not the injured person's employer.
3. Whether the policy's severability clause required the employee exclusion to be applied separately to Horn rather than by reference to B & B's status.

Disposition

affirmed