American States Insurance v. Progressive Casualty Insurance

Liability insurance policies for commercial motor vehicles typically include an “omnibus clause.” As pertinent here, that clause defines as an “insured” one who is vicariously liable for the conduct of a named insured or a permissive user in using or operating the covered vehicle.

In this appeal, we conclude that such an “omnibus clause” may make a person or entity that is potentially vicariously liable under the peculiar risk doctrine an “insured,” and thereby entitled to a defense pursuant to the insurance policy. Under the peculiar risk doctrine, one may be held vicari ously liable if one hires an independent contractor to do work that is likely to create a peculiar risk of harm to others unless special precautions are taken.

The alleged peculiar risk in the present case arose out of a trucker-pedestrian accident at the lone entrance of a construction site. There is evidence that this intersection entrance required the trucker to make a U-tum (while driving westbound in eastbound lanes), encroach on at least two pedestrian crosswalks, jump a curb, and drive across a sidewalk.

We reverse a summary judgment and a stipulated judgment that concluded, as a matter of law,…