By Brent Hedges
Scenario:
Imagine a situation where an insured prime mover/trailer combination is being driven along the Highway. Approaching in the opposite direction is another heavy vehicle combination.
A wheel on the trailer of the insured vehicle detaches, and either collides with the oncoming vehicle or, alternatively, causes the driver to take evasive action to avoid the wheel—both scenarios result in damage.
The insurer of the third party vehicle looks to our insured for compensation—typically a significant sum.
So who, if anyone, wears the blame?
Depending on the circumstances, several possibilities arise. The first question to be asked is: “is the insured liable for the damage of the third party vehicle”? The second question is: “is the insured entitled to indemnity under the policy in respect of any potential liability”?
There are two likely outcomes:
If the wheel detached because of a lack of maintenance on the part of the insured, or due to “in house” maintenance that was performed negligently, the insured would most likely be held liable for the third party’s damage, and would not be entitled to indemnity under the policy, because of the exclusion for such negligence within the policy relating to unsafe or unroadworthy condition and knowledge thereof.
On the other hand, if the detachment of the wheel was as a result of a component failure, and the defective component was not one which the insured knew (or ought to have known) about, then the insured will most likely be entitled to indemnity under the policy, and would not likely be held liable to the third party.
The liability rests on whether the insured knew or ought to have known about the defect causing the accident. Should the insured be found liable due to such negligence, the underwriters would not be obliged to indemnify the insured in respect of the claim, and it would then be a matter for the insured to deal with the third party’s claim alone. The standard is clear—any evidence of negligence regarding maintenance would probably be sufficient to enable the third party to succeed.
Conclusion:
The above scenario is regrettably more common than you may expect. Most insured parties assume that they should not be held liable for damage resulting from a wheel detaching from their vehicle, and likewise expect their insurers to underwrite such claims.
However, there is a close link between the terms of the policy, and more particularly the exclusions, as discussed. As always, it is very important that these terms are communicated as clearly and succinctly to an insured when claims of this nature arise, as early as possible.
Brent Hedges is a Solicitor at Walker Hedges & Co Solicitors
