Background
Eric Horsman died after an April 2021 motor-vehicle accident that occurred during his employment with Phalanx Engineering, Inc., where he was an assistant vice president. He was driving a Phalanx-owned vehicle covered by a Travelers commercial auto policy insuring twenty-six fleet vehicles. The policy named Phalanx, a corporation, as the insured and provided a $1 million per-accident underinsured motorist limit.
Travelers agreed that Horsman was insured because he occupied a covered vehicle and paid his widow, Shilo D. Horsman, the $1 million UIM limit. She nevertheless sought to stack the limits for all twenty-six vehicles, claiming entitlement to $26 million. The Superior Court granted Travelers summary judgment and denied her cross-motion, concluding that Horsman could not be considered an individual named insured. She appealed.
The Court’s Holding
The Rhode Island Supreme Court affirmed. The policy unambiguously permitted stacking only when bodily injury was sustained by an individual named insured, while the named insured here was Phalanx. Horsman was instead insured by virtue of occupying a covered vehicle, and his status as a corporate officer acting within the scope of employment did not transform him into an individual named insured. The court held that Martinelli v. Travelers Insurance Companies did not create the exception Horsman asserted.
The court also rejected waiver and illusory-coverage arguments. Travelers’ pre-suit correspondence sufficiently explained that the policy allowed only one $1 million per-accident limit, and Travelers did not later rely on newly acquired information. The coverage was not illusory because the policy provided—and Travelers paid—$1 million in UIM benefits, even though stacking was unavailable.
Finally, Rhode Island’s UM/UIM stacking statute, G.L. 1956 § 27-7-2.1(i), did not require stacking. Under Finch v. Centennial Insurance Company, the statute does not apply to a commercial fleet-policy claimant who did not pay the premiums and is insured only through occupancy of an employer’s covered vehicle. Phalanx, not Horsman, paid the policy premiums.
Key Takeaways
- An employee occupying an employer’s covered fleet vehicle does not become an individual named insured merely because the employee is a corporate officer acting within the scope of employment.
- UIM coverage is not illusory simply because a policy provides stacking only for individual named insureds while naming a corporation as the insured, so long as meaningful UIM coverage remains available.
- Rhode Island’s statutory stacking provision does not entitle a class-II insured who paid no premiums to aggregate the UIM limits for vehicles in an employer’s commercial fleet.
Why It Matters
The decision confirms that Rhode Island courts will enforce the distinction between a corporation named in a commercial fleet policy and employees insured only while occupying covered vehicles. That distinction controls not merely whether coverage exists, but whether an insured may aggregate limits across a fleet.
For insurers and employers, the ruling reinforces the enforceability of a single per-accident UIM limit under commercial fleet policies with clear language. For claimants, it underscores that corporate status, employment duties, and occupancy-based coverage do not establish the premium-paying relationship required for statutory stacking.