Markel unit loses coverage fight over backdated policy

Markel Group Inc. unit Evanston Insurance Co. must pay under its umbrella coverage for a car accident, a federal appeals court ruled on Wednesday in a case that focused on a backdated policy.

A car driven by a traveling nurse struck a van carrying nine passengers in North Dakota in July 2014, according to a ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Tavita Farani; Tyler Bunting; Michael Locke v. Leslie File v. Evanston Insurance Co.

The nurse, a Mississippi resident who worked for Omaha, Nebraska-based Primetime HealthCare LLC, was on assignment in Montana and driving an automobile rented by her company for her use but was not on official work duties at the time of the wreck.

Three of the vehicle’s injured occupants sued the nurse and were awarded $2.1 million by a jury. Primary insurer Travelers Casualty Insurance Co. of America paid up to its policy’s limits.

Evanston refused to pay under its umbrella policy, which provided up to $2 million in coverage.

In the ensuing litigation, which centered on when Travelers was added to the schedule of insurers, the U.S. District Court in Jackson, Mississippi, ruled that Evanston’s policy covered the accident and granted summary judgment.

A three-judge appeals court panel affirmed the lower court. According to the ruling, the Travelers policy was in effect at the time of the accident but was not added by Evanston to the schedule of insurers until two months later in September. Evanston backdated the Travelers policy to July 22, 2014, which was a day before the accident.

The Evanston policy “is plain and unambiguous and reading the policy as a whole, Travelers Insurance was in effect before the accident occurred, both by the backdating or by virtue of it being an insurance available to the insured. Therefore, (Evanston) must honor its coverage obligations” the ruling said.

Ms. Farani’s attorney, Eric S. Olson, of Cutt Kendell & Olson in Salt Lake City, said in a statement, “I have always been puzzled at why Evanston fought this coverage issue so hard and so long. It was a straightforward issue that the District Court Judge correctly decided, and the 5th Circuit affirmed. Evanston’s interest in resolving the dispute along the way was also stunningly low for how difficult of a position they were taking.”

Other attorneys in the case did not respond to requests for comment.