Employer’s automobile insurance policy did not respond to a motor vehicle accident involving an employee in a rental vehicle which was itself insured as required by law.

Macrae v. Liberty International Underwriters, a Division of the Liberty Mutual Insurance Co., [2017] O.J. No. 3855, 2017 ONSC 4522, Ontario Superior Court of Justice, July 25, 2017, A.K. Mitchell J.

The insured was involved in a motor vehicle accident in Texas while driving a rental vehicle with his spouse as passenger. The other vehicle was inadequately insured. The insured’s employer had automobile insurance issued by Liberty International Underwriters (“Liberty”) which contained a family protection endorsement that provided underinsured motorist coverage. At issue was whether the Liberty policy responded to this loss.

The Court applied OAP 1 which provides that “automobiles, other than the described automobile, are also covered when driven by you, or driven by your spouse who lives with you. “You” referred to the insured’s employer and “described automobile” did not refer to the rental vehicle. Further, there was an exclusion from coverage for other automobiles if the other automobile was owned, leased, or rented by the employee or their partner and was insured as the law required. The rental vehicle was properly insured and thus the Liberty policy did not apply.