If The Truck Is Big, Is More Insurance Required?

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Las Vegas is a popular convention destination.  The largest convention venue in town is the Las Vegas Convention Center, which touts over 4.6 million square feet of convention space.  Event planning professionals keep busy, helping their clients set up, present and then take down the displays that fill these convention spaces.  

One such event planning organization is CCR Solutions.  CCR Solutions advertises on its website that it is a leader within the Audio Visual Staging Industry.  CCR helps companies effectively showcase their products, ideas or key messages.  

CCR had a client that needed video displays set up at a hotel in Vegas.  CCR rented a truck from Penske Truck Leasing to move the equipment to the venue.  Along the way, CCR’s employee caused an accident, injuring two people.  

CCR had its liability insurance with New York Marine & General Insurance Co.  In addition, CCR had purchased liability insurance in conjunction with its rental of the truck.  When it came time to deal with the injuries, the insurance company was pitted against Penske Truck Leasing and Penske’s insurance obligation included in its rental agreement.  The full story of this dispute is told in the case of New York Marine & Gen. Ins. Co. v. Penske Truck Leasing Co., 457 F. Supp. 3d 912, 2020 U.S. Dist. LEXIS 109758, 2020 WL 3433118.  

At the heart of the fight was the amount of coverage that Penske had to provide.  The Penske contract said its coverage was 

in accordance with the standard provisions of a basic automobile liability insurance policy as required in the jurisdiction in which the Vehicle is operated, against liability for bodily injury, including death, and property damage arising from use of Vehicle as permitted by the Rental Agreement, with limits as required by the applicable province, territory or state financial responsibility law (as applicable or other applicable statute).

On the date of loss, the automobile financial responsibility limits were $15,000 each person, $30,000 each accident according to NRS § 458.3091.  Penske said that that was the most it should have to pay.  

The Insurance Company ingeniously countered that this rental truck was not a basic auto, but was a vehicle with a gross vehicle weight rating of between 10,001 to 26,000 pounds.  Nevada Regulation NAC § 706.288 says that the minimum coverage for a vehicle of that size is $300,000.  Or if the federal requirements are followed the amount should be $750,000.  49 CFR 387.9.  

The Court rejected the Insurance Company’s argument.  The Court pointed out that the higher limits of coverage were required of “motor carriers”.  The Court said that there was no evidence that CCR met the definition of a “motor carrier” under either the federal or the state definition.  The Court said that it was persuaded by Penske’s argument that the amount of insurance required under the Penske contract was the amount required by NRS § 485.3091, namely $15,000 each person, $30,000 each accident.  

If you have questions about Nevada Trucking, Coverage or Insurance Law, please contact Mike Mills at 702.240.6060×114 or email him at mmills@blwmlawfirm.com.