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Ohio Supreme Court Holds That A School’s Insurance Coverage Applies When Students Are Injured in a Chartered Bus.

December 30, 2010

The Ohio Supreme Court, faced with the tragic deaths and injuries of college athletes in a bus accident, held that the  university’s insurance coverage applies when students were transported by  a vehicle “owned, hired or borrowed” by the university.  The Court said the school’s insurance coverage applies when the driver, generally hired by a charter bus or transportation company, is operating “with permission.”  This decision should lead to more careful decisions by schools when they hire  or allow outside bus companies to transport children and students.

The Columbus Dispatch story follows:

Ohio Supreme Court rules in bus wreck survivors’ favor

BY ALAN JOHNSON

In a victory for the families of victims of a 2007 bus crash involving the Bluffton University baseball team, the Ohio Supreme Court today ruled that the university’s insurance is liable to cover the costs of the accident.

The court’s 5-2 decision overturned a 3rd District Court of Appeals ruling in favor of the insurance companies. The Supreme Court sent the case back to the trial court for further action.

The decision could mean an additional $21 million for victims of the March 2, 2007, crash.

Justice Paul E. Pfeifer, writing for the majority in the case, said the university, through its insurance company, is liable when transporting students in a vehicle “owned, hired or borrowed” by the university. The court said coverage applies when the driver, generally hired by a charter bus or transportation company, is operating “with permission,” a broad but undefined term.

The accident happened in the early morning hours of March 2 when the driver of an Executive Coach bus took a freeway exit ramp in Atlanta, Ga., he apparently thought was a carpool lane, sending the bus plunging to the highway below. Five baseball players, the driver and his wife were killed, and several others were injured. The team was traveling to a baseball tournament in Florida.

The university’s insurance companies balked at covering the accident. The bus company has already paid $5 million and the state of Georgia $3 million in claims related to the crash.

Attorney Steven R. Smith, who represented John Betts, the father of David Betts, one of the baseball players killed in the accident, said the decision is a “victory with an asterisk” for his client.

“He was very pleased, but the underlying loss we can’t forget is it will never bring back his son. Money will never compensate these people for the losses they’ve suffered. This is a win under tragic circumstances.”

Smith declined comment on whether this decision would open universities to greater liability in transporting student athletes. He said it hinges on the “omnibus” clause covering who is allowed to drive the vehicle.

“I do think the clause is broad enough to cover a variety of circumstances,” he said.

Justice Evelyn Lundberg Stratton said in a dissenting opinion joined by Justice Terrence O’Donnell, that the ruling “unreasonably extends coverage to a third party and effectively opens the door for similar claims under other scenarios because the omnibus clause is standard in many insurance policies.”

http://www.dispatch.com/live/content/local_news/stories/2010/12/28/ohio-supreme-court-rules-for-bus-wreck-survivors.html?sid=101

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