This Horse Farm’s Insurer Will Have to Defend an Off-site Golf Cart Accident, Court Determines

A golf cart accident at a county fair leads to a court battle between the cart's owner and its insurer.
By: | September 15, 2021

St. Charles Farms, a horse farm and equestrian center in St. Charles, Ill., offered off-site trail riding events on different forest preserves several times a year. In one such instance at the Kane County Fairgrounds, Robert Shockley Jr. was riding inside a golf cart with a St. Charles Farms employee.

The St. Charles’ employee driving the golf cart had also been responsible for the transportation of horses and equipment to the center of the riding location. One horse got away, and the employee began to chase it down, with Shockley riding shotgun.

He was thrown out after encountering a bump and promptly had his leg run over.

Shockley filed a negligence suit against the horse farm.

St. Charles Farms turned to its insurer, American Bankers Insurance Company of Florida. The farm held a farm owner policy through the insurer with limits for commercial liability coverage.

The policy included an additional insured endorsement that said it “changes the commercial liability coverages provided by this policy” in order to cover off-site riding events. The endorsement was issued to the Kane County Fairgrounds. It also amended the definition of “insured” to include the Kane County Fairgrounds.

It further included supplemental coverage for “bodily injury or property damage from “a ‘motorized vehicle’ which is designed only for use off public roads and which is used to service the ‘insured premises.’ (However, this coverage does not apply to ‘bodily injury’ or ‘property damage’ which results from a ‘motorized vehicle’ while used for recreational purposes away from the ‘insured premises’.)”

St. Charles Farms said that under these provisions, American Bankers should cover the underlying suit. However, the insurer pointed to a different clause: exclusion six.

This exclusion states that the policy would not provide coverage for bodily injury or property damage arising from the use of a motorized vehicle except as provided by the supplemental coverage.

Because the fairgrounds were not the “insured premises,” the insurer argued, the supplemental coverage did not apply. American Bankers filed for summary judgment.

The district court found that because the insurance policy was a farm owner’s policy rather than a commercial general liability policy, it granted American Banker’s motion for summary judgment. Initial appeals court remanded the case and said American Bankers had no duty to defend or indemnify St. Charles Farms or its employee in the Shockley suit.

But the Illinois States Court of Appeals saw it differently. It reversed the ruling, stating, “The insurance contract … is ambiguous. In Illinois, ambiguities are resolved against the insurer and in favor of the insured.”

Scorecard: Due to the lower appeals court’s misinterpretation of the insurance policy, the States Court of Appeals reversed the court’s decision.

Takeaway: When insuring a company that attends off-site events, it is best to review coverages prior to incident and define all terms in the policy lest they be misconstrued. &

Autumn Demberger is a freelance writer and can be reached at [email protected].