It’s not uncommon for people who have access to work vehicles to use those vehicles for personal reasons, particularly if they have their employer’s blessings. However, all parties involved in such situations should be careful in regards to how this arrangement would be covered by insurance. In a recent case heard by the Court of Appeal for Ontario, a decision by a lower court imposing an obligation on an insurance company to provide coverage to an employee’s spouse when operating a work vehicle.

The accident

The employee was employed as a delivery van driver for the employer, who operated a flower company. The employee’s spouse was driving the van on the morning of September 25, 2014, when she was struck by someone driving a stolen vehicle.

Following the accident, the insurer brought a motion to determine whether their insurance policy, issued to the employer, provides insurance coverage to the employee’s wife. The motion judge determined that they did, in fact, have to provide coverage, writing,

“On the day of the accident, (the employer) opened for business as usual at 9:00 a.m. (The employee) had a flexible schedule, although it was understood that he would regularly arrive at work by 9:30. (The employee) was not required or expected to seek permission from anyone at (the employer) during business hours to take the van’s keys off the hook where they were stored or to drive the van in order to make the daily deliveries. He did so at his own discretion.

“The precise time of (The employee’s) arrival at work on the morning of September 25, 2014 is not certain, although it was likely sometime around 9:30. (The employee’s) memory is that he was just arriving at work on his bicycle that morning when he received a phone call on his cell phone advising him that (the employee’s wife) had been injured in an accident. As counsel for (the insurer) points out, the implication of that is that the accident actually occurred sometime just prior to (the employee) arriving at work.”

The motion judge disagreed with the insurer’s position that the employee would only be covered under the endorsement if he was “on duty” at the moment of the accident, writing,

“The employee could have arrived at 9:00 when the shop opened and started his deliveries first thing in the morning of the accident, even though he didn’t. The fact that (he) did not arrive early does not negate the fact that the company vehicle was available for his use as of 9:00 and the accident happened at about 9:30.”

The court’s analysis

The employer argued that the insurance coverage should only be available when the employee was actually working. However, the court agreed with the motion judge’s determination that since the van was available to the employee for “regular use” during business hours, it was sufficient to determine that the coverage should apply while the van was used during business hours.

At HMC Lawyers our Insurance Team has decades of collective experience and a deep, thorough understanding of potential risks as well as legal issues that commonly arise.  We understand the importance of risk management, especially when it comes to questions of insurance coverage and strive to provide our clients with certainty by helping them identify and avoid potential problems wherever possible. To discuss an insurance coverage matter or related dispute, call 1-800-480-3534 or contact us online.