August 15, 2025
Federal Court Upholds Insurer’s Coverage Denial Based on Bill of Lading Exclusion
A Nicolaides team led by Cody S. Moon and Allison V. Henry secured a summary judgment victory for a national insurer in a high-stakes insurance coverage and bad faith dispute involving a trucking accident and the interpretation of a transportation broker liability insurance policy.
The dispute arose from a 2021 highway accident in which two 25,000-pound steel rolls dislodged from a flatbed trailer and struck other vehicles, resulting in multiple bodily injury lawsuits. The insured, a transportation company that is federally authorized as both a freight broker and motor carrier, was listed as the carrier on the bill of lading for the shipment. The insurer denied coverage under the broker liability policy based on an exclusion that bars coverage when the insured is listed on the bill of lading.
The insured filed claims for breach of contract and bad faith. The insured asserted that a third-party, the shipper, listed the insured’s name on the bill of lading and the insured argued that such listing was an error beyond its control. Nicolaides successfully obtained judgment on the pleadings for the bad faith and punitive damage claims, and later obtained summary judgment on the remaining coverage issue. The U.S. District Court for the Eastern District of Pennsylvania held that:
The dispute arose from a 2021 highway accident in which two 25,000-pound steel rolls dislodged from a flatbed trailer and struck other vehicles, resulting in multiple bodily injury lawsuits. The insured, a transportation company that is federally authorized as both a freight broker and motor carrier, was listed as the carrier on the bill of lading for the shipment. The insurer denied coverage under the broker liability policy based on an exclusion that bars coverage when the insured is listed on the bill of lading.
The insured filed claims for breach of contract and bad faith. The insured asserted that a third-party, the shipper, listed the insured’s name on the bill of lading and the insured argued that such listing was an error beyond its control. Nicolaides successfully obtained judgment on the pleadings for the bad faith and punitive damage claims, and later obtained summary judgment on the remaining coverage issue. The U.S. District Court for the Eastern District of Pennsylvania held that:
- The bill of lading exclusion was unambiguous and enforceable, regardless of how or why the insured was listed;
- The policy’s broker-only coverage terms did not apply due to the insured’s presence on the bill of lading;
- The insurer had no duty to defend or indemnify the insured in the underlying bodily injury actions.