Carrying People or Property for a Fee: Where Does Coverage Stop?


Your neighbor’s teenage son uses his car to deliver pizzas at a summer job. He is involved in an automobile accident. Does he have insurance coverage??

In Prudential Property and Casualty Ins. Co. v. Sartno, the Pennsylvania Supreme Court addressed this exact scenario. The court found that the pizza delivery driver had coverage for the accident even though it had occurred as part of his employment. The driver’s policy, like most personal auto policies, excluded coverage for bodily injury or property damage occurring when an automobile is used to carry people or property for a fee. Although the driver received wages for making deliveries and performing other job responsibilities, the court held that the exclusion did not apply because in that case, there was no delivery charge. The ruling was consistent with other jurisdictions which have refused to deny coverage to pizza delivery drivers based on the “hired auto” exclusion.?

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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