Aerospace Insurance Update - Ninth Circuit Agrees Fuel Truck Collision Arises Out of Maintenance of Helicopter, But Selective Tender Rule Precludes Insurer’s Liability for Equitable Contribution

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U. S. Court of Appeals, Ninth Circuit

In XL Specialty Insurance Co. v. Progressive Casualty Insurance Company, 2011 WL 182154 (9th Cir. Jan. 20, 2011), the U.S. Court of Appeals for the Ninth Circuit affirmed the decision of the district court in Montana, which was reported in our February 2010 Aerospace Insurance Update. The court concluded that XL’s policy insuring a helicopter provided coverage for a traffic accident involving the insured’s fuel truck because it “arose out of” the maintenance and use of the helicopter, but that the selective tender rule barred Progressive’s equitable contribution claim against XL.

In the instant case, the insured’s fuel truck, while on its way to refuel the insured’s helicopter, struck the underlying plaintiffs’ auto. Progressive, which insured the fuel truck, defended the plaintiffs’ action against the insured.

Applying Montana’s expansive interpretation of “arising out of,” the Ninth Circuit agreed that even though the helicopter was not directly involved in the accident, it nevertheless was the “prime accessory without which the accident would not have occurred.” Consequently, the injuries “originated from, grew out of, and flowed from the maintenance of the aircraft.”

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