Academic journal article Journal of Risk and Insurance

Illinois Supreme Court Enforces Automobile Exclusion in Liability Policy, Precluding Coverage for School District in Serious Tort Matter

Academic journal article Journal of Risk and Insurance

Illinois Supreme Court Enforces Automobile Exclusion in Liability Policy, Precluding Coverage for School District in Serious Tort Matter

Article excerpt

ILLINOIS SUPREME COURT ENFORCES AUTOMOBILE EXCLUSION IN LIABILITY POLICY, PRECLUDING COVERAGE FOR SCHOOL DISTRICT IN SERIOUS TORT MATTER

Northbrook Property & Casualty Co. v. Transport Joint Agreement, 741 N.E.2d 253 (Ill. 2000).

On October 25, 1995, a train collided with a school bus operated jointly by several Illinois school districts. "Several students were killed and many others were injured, resulting in numerous lawsuits against the school districts." 741 N.E.2d at 254. A tragic accident of these proportions and an ordinarily sympathetic public entity policyholder is thought by many to maximize the chances for obtaining insurance coverage. In this case, however, the insurer scored a decisive victory, perhaps casting doubt on the conventional wisdom. The Illinois Supreme Court held in a unanimous and direct (barely two pages) opinion that the commercial general liability (CGL) policy held by the school districts did not cover the claims or require a defense.

The CGL policy in question contained an exclusion for bodily injury or property damage "arising out of the ownership, maintenance, or use" of any automobile and stated that "[u]se includes operation and 'loading or unloading."' 741 N. …

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