Superior Court reverses decision favoring Tuscarora Wayne Insurance in coverage dispute over fire

By Asia Mayfield | Oct 18, 2018

HARRISBURG -- The Superior Court of Pennsylvania reversed a ruling favoring Tuscarora Wayne Insurance Co. TWIC, which says part of its contract with Hebron Inc. excused it from liability for certain accidents.  

The trial court agreed and granted summary judgment to TWIC, freeing the company from having to defend Hebron from claims related to a fire that broke out in May 2014. The appeal followed. Hebron successfully convinced the judges that the language of the insurance contract was ambiguous. The trial court’s ruling was reversed on Oct. 3.  

The court notes that, “At the time of the fire, Hebron was the named insured under a commercial liability policy issued by TWIC. The policy included an endorsement that excluded 'designated ongoing operations.'”  

Those operations were further defined as “vehicle dismantling.” The insurance policy specifically doesn’t apply to “property damage arising out of [vehicle dismantling], regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or for others.”  

The phrase “vehicle dismantling” isn’t defined further. The May 2014 fire started after a truck driver was attempting to refuel a company vehicle. In September 2014, TWIC filed an action seeking the court’s declaration that it was under no obligation to defend Hebron from complaints related to the fire.  

The appeals court remarks that when it comes to insurance contracts, “if the provisions are ambiguous, the provisions are to be construed in favor of the insured and against the insurer.”  

Hebron argued that although it does engage in activity that could be described as vehicle dismantling, that activity was not related to the fire. The fire was triggered by a faulty extension cord. That’s why the justices determined that “the trial court abused its discretion... and committed error of law in declaring that TWIC was not required to defend or indemnify Hebron based on the exclusion.”  

The case has been remanded to the lower court.  

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