Insurance Omnibus Clauses: Determining Permissive User Status in Auto Liability Cases; Exclusions and Limitations

An "omnibus clause" in standard automobile liability policies (or auto endorsements to general commercial liability policies) extends coverage to those not named in the policy but who are using a covered auto with permission. A typical scenario is a commercial vehicle being driven by a company employee or driving their own vehicle. Multiple policies and allocation issues may also come into play, such as when a business has hired a third party and both have policies that might cover the accident.

Courts rely on many different factors when determining whether the driver is a "permissive user" entitled to coverage. Assuming the insured has the capacity to grant permission, questions arise regarding what constitutes permission, whether effective and valid permission must be express or can be implied, the scope of permission and how far a driver may deviate from the terms of the grant, and whether the original permissive user may grant permission to others, to name a few.

Moreover, even if the driver is found to be a permissive user, coverage might still be denied for other reasons, and counsel for the defendant driver or an injured plaintiff needs to understand the options and how to avoid losing coverage.

Listen as this experienced panel of insurance coverage lawyers discusses how to determine whether the driver qualifies as a "permissive user," the various positions taken by different jurisdictions under recurring scenarios, and practices and strategies for navigating coverage issues for the permissive user.

1. Omnibus insurance clauses: history, wording
2. Applicable statutes
3. Establishing permissive use
   1. Capacity
   2. Grant of permission: express or implied
   3. Scope of permitted use
      1. "Initial permission"
      2. "Conversion"
      3. "Minor deviation"
      4. Specific situations
         1. Subsequent permissions
         2. Ridesharing
         3. Unlicensed drivers
         4. Rental car
         5. Use vs. operation
         6. Multiple policies and allocation issues
         7. Effect of third-party agreements, such as master service agreements
4. Exceptions and limitations of coverage
5. Rights of an injured named insured against the permissive user
6. Strategies where permissive user denied coverage for other reasons

The panel will discuss these and other key questions:

• Are permissive drivers entitled to access the entire policy limits or can insurers limit the proceeds for permissive drivers?
• If more than one policy applies, how are proceeds allotted?
• Do financial responsibility laws override any policy exclusions for unauthorized users?
• In determining whether permissive use exists by express permission, what are good questions to ask? For establishing implied permission?