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Insurance coverage denied due to discrepancy in insured business activities. Hermitage Ins. Co. v. TAC Blacktop, Inc. 2015 N.Y. Slip Op. 31516 (N.Y. Sup. Ct. 2015)


In a recent legal dispute, Hermitage Insurance Company sought a declaratory judgment against TAC Blacktop, Inc. regarding coverage under a policy issued to TAC. The case involved two personal injury actions stemming from a motorcycle accident allegedly caused by TAC’s paving activities. Hermitage moved for summary judgment, asserting that TAC’s operations exceeded the scope of coverage defined in the insurance policy.

Insurance companies only insure activities explicitly within the scope of the policy, as outlined in detailed classifications and coverage limitations. In this case, Hermitage Insurance argued that TAC Blacktop’s paving activities, which involved covering a trench on a roadway, fell outside the policy’s designated classifications for driveway, parking area, or sidewalk paving. This precise delineation is important because insurance policies are crafted to mitigate specific risks associated with defined operations. The allegations highlight how deviations from these specified activities can lead to coverage disputes.

Background Facts
Hermitage Insurance Company issued a policy to TAC Blacktop, Inc., classifying its coverage under code “92215” for “driveway, parking area or sidewalk-paving or repaving.” TAC primarily undertook paving work for residential properties and small homeowners, including sidewalks, driveways, and pathways. The claim stems from two personal injury actions involving a motorcycle accident on the 440 West Shore Expressway, Staten Island. Allegedly, TAC paved over a trench dug for Con Edison’s utility installation, contributing to the accident. Hermitage contends the Policy’s classification limits coverage to specific paving activities like driveways and sidewalks, excluding coverage for the roadway work in question. TAC argues its general paving work encompasses the accident site, disputing Hermitage’s coverage denial. This dispute centers on interpreting the Policy’s coverage limitations and TAC’s operational disclosures.

Whether Hermitage had a duty to defend or indemnify TAC in personal injury lawsuits arising from the motorcycle accident. Hermitage argued that TAC’s paving activities at the accident site fell outside the designated coverage classification of the insurance policy.

The court granted Hermitage’s motion for summary judgment, ruling that the insurance policy did not cover TAC’s activities at the accident location. Therefore, Hermitage had no obligation to defend or indemnify TAC in the underlying personal injury lawsuits.

The court’s decision was based on the clear and unambiguous terms of the insurance policy. The policy explicitly limited coverage to specific types of paving activities related to driveways, parking areas, or sidewalks. TAC’s work on a roadway trench did not fall within these covered categories, as per the policy’s classification code “92215.” Despite TAC’s assertions and the interview discrepancies, the court found no ambiguity in the policy language that would extend coverage to the accident site.

The Supreme Court’s decision, granting summary judgment in favor of Hermitage Insurance Company and denying coverage to TAC Blacktop, Inc., has significant implications for the injured victim in the motorcycle accident. With Hermitage absolved of any duty to defend or indemnify TAC, the victim’s ability to seek compensation directly from TAC’s insurance coverage under the Policy is now legally blocked. This means the victim cannot rely on TAC’s insurance to cover medical expenses, lost wages, or other damages resulting from the accident.

Instead, the victim may need to explore alternative avenues for compensation. This could involve pursuing a claim directly against TAC through litigation, seeking damages based on TAC’s liability for negligently paving over the trench that contributed to the accident. Alternatively, the victim might have to rely on their own insurance coverage, such as personal injury protection (PIP) or uninsured/underinsured motorist (UM/UIM) coverage, if applicable.

Given the complexity of insurance disputes and liability issues, the victim’s legal recourse may involve consulting with an experienced New York motorcycle accident lawyer. Such legal counsel can help navigate the legal landscape, assess potential avenues for compensation, and advocate for the victim’s rights in seeking fair and just compensation for their injuries and losses.

This case highlights the importance of understanding insurance policy terms and ensuring that coverage aligns with the scope of operations to avoid potential disputes and financial liabilities.

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