INSURANCE (Excluded Coverage of Death While on “Corporate Aircraft”) / Employee’s surviving relatives bring lawsuit for denial of life insurance benefits where insurer’s initial response was denial of claim “based on a policy exclusion for ‘Corporate Owned or Leased Aircraft’”.

This case is reported while in the pleading stage, and the opinion and order relates to plaintiffs’ motion to amend their complaint (which district court granted). Odd facts in that the stated ground of insurance company’s initial denial related to “corporate aircraft” although court states that death occurred in a motorcycle event. Plaintiffs’ successfully moved to add major motor carriers USF Reddaway and YRC Worldwide, Inc. as defendants. Did decedent travel to event on corporate aircraft? Were they sponsors in some manner?

My point: Apparently under some life insurance or other death benefits policies travel on “corporate aircraft” is the subject of a coverage exclusion clause. This denial of claim based on “corporate aircraft” does not relate to a marginal or offbeat carrier (Zurich American Insurance Company), nor if “corporate aircraft” are in fact involved does this appear to relate to marginal or offbeat businesses (USF Reddaway and YRC Worldwide, Inc).

Martha Taylor v. Zurich American Insurance Co., Case No. CV 11-08110-PCT-JAT, Slip copy (U.S. District Court for the District of Arizona, April 1, 2013). Free copy available here.

Note: Subsequent to initial denial based on “corporate aircraft” exclusion, according to the initial complaint, insurer next based its denial on “extra-hazardous activity” exclusion, and – thirdly – on the basis that decedent’s death was not an “accident”.