The Kentucky Supreme Court recently held that an injury to employee exclusion does not bar coverage for a permissive user of an insured auto sued for the employee’s death. Tower Ins. Co. of New York v. Horn, 472 S.W.3d 172 (Ky. 2015).

An employee fell from a company truck and was fatally injured. The driver of the truck was a friend of management who was driving the truck while the company was short-staffed. He was not an employee and did not receive compensation. When a wrongful death action was filed against the driver for the employee’s death, the driver asserted that the company’s auto policy covered the claim against him. The insurer intervened seeking a declaration of rights as to its obligation to defend and indemnify the driver.

The trial court granted summary judgment for the insurer, finding that while the driver was a permissive user and thus an insured under the policy, the policy’s exclusion that excluded coverage for bodily injury to an employee of the insured precluded coverage for the employee’s death. The trial court did not find that the policy’s severability clause negated the exclusion. The driver appealed.

The court of appeals reversed. While the court of appeals agreed the driver was an insured, it found that the severability clause applied separately to each insured, thereby rendering the exclusion ineffective as to the driver who was not the employer of the employee. The Kentucky Supreme Court affirmed, finding that exclusion did not apply to the driver/permissive user.