Insurance-Operations Exclusion

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7^th Circuit Court of Appeals

Case Name: Artisan and Truckers Casualty Company v. Burlington Insurance Company

Case No.: 22-2683

Officials: Flaum, Brennan, and Kirsch, Circuit Judges.

Focus: Insurance-Operations Exclusion

An incident occurred at a construction site leading to bodily injuries suffered by Cruse and Duckworth. The mishap transpired during the installation of roof trusses when a power crane, operated by Douglas Forrest, was prematurely released, causing a truss to fall and collapse onto others, resulting in injuries to Cruse and Duckworth. Southern Truss, the owner of the truck to which the crane was attached, held two insurance policies – a commercial auto policy from plaintiff Artisan and Truckers Casualty Company (Artisan) and a commercial general liability policy from defendant The Burlington Insurance Company (Burlington). Both insurance providers disclaimed any duty to defend in the subsequent lawsuit initiated by Cruse and Duckworth.

Artisan sued in federal court suit, seeking a declaration that it was not obligated to defend under its auto policy due to an operations exclusion clause and asserting that Burlington had a duty to defend. The district court denied the motions for judgment from both companies, citing an ambiguity in Artisan’s policy that should be interpreted in favor of the insured, and determining that Burlington had a duty to defend some claims not covered by Artisan’s policy. Both Artisan and Burlington appealed.

Upon applying Illinois law and conducting a de novo review, the appeals court found no ambiguity in Artisan’s policy. It concluded that the operations exclusion applied, as the injuries stemmed from the operation of the crane attached to the truck, which primarily served to provide mobility to the crane. Consequently, Artisan was absolved of any duty to defend. Given Artisan’s lack of duty to defend, the court determined that Burlington did indeed have a duty to defend under its policy.

Affirmed in part and reversed in part.

Decided 01/08/24

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