The Office of General Counsel issued the following informal opinion on March 7, 2002, representing the position of the New York State Insurance Department.
Re: Insurance Coverage of a Livery Vehicle
Does New York State Law require an owner of a livery vehicle to maintain a minimum amount of $100,000/$300,000 in third party liability coverage?
No. New York State Law requires that owners of all motor vehicles operating in New York must maintain a minimum amount of $25,000/$50,000 in third party liability coverage on their vehicles. It is a requirement of the New York Taxi and Limousine Commission that livery vehicles operating in New York City must maintain a minimum of $100,000/$300,000 of such coverage.
Attorney A represents a client injured in an accident while a passenger in a livery vehicle in New York City. Attorney A stated that it was his understanding that New York statutorily requires a livery vehicle to maintain $100,000/$300,000 in liability coverage. Attorney A stated that he was informed by counsel for the livery vehicle driver that the vehicle maintained $25,000/$50,000 in liability coverage from one insurer and additional excess liability coverage from a second insurer, the total of which met the $100,000/$300,000 requirement. Attorney A also stated that the second insurer had disclaimed coverage for failure to receive notice. Under these circumstances, Attorney A questioned whether New York public policy requires that the second insurer provide the additional coverage.
Attorney As request raises both an issue of law and an issue of fact.
With respect to the minimum liability amounts for motor vehicles required under New York Law, the requirements are governed by Article 8 of the New York State Vehicle & Traffic Law. N.Y. Veh. & Traf. Law § 310(2) (McKinney 2000) declares that as to the purpose of the law, "The legislature determines that it is a matter of grave concern that motorists shall be financially able to respond in damages for their negligent acts, so that innocent victims of motor vehicle accidents may be recompensed for the injury and financial loss inflicted upon them. The legislature finds and declares that the public interest can best be served in satisfying the insurance requirements of this article ." This public policy with respect to for-hire vehicles is implemented through N.Y. Veh. & Traf. Law § 370 (McKinney 2000), which establishes that an owners policy of liability insurance must maintain bodily injury liability coverage for injury to one person in a motor vehicle accident in an amount not less than $25,000 per person and for injury to two or more persons in an amount not less than $50,000.
However, with respect to livery vehicles licensed to operate in New York City, the New York City Taxi and Limousine Commission requires that each owner of a for-hire vehicle (e.g. taxicab, livery, black car, silver car, limousine) must maintain bodily injury liability coverage for injury to one person in a motor vehicle accident in an amount not less than $100,000 per person and for injury to two or more persons in an amount not less than $300,000. These minimum requirements can be met by either a single policy providing the required limits on a primary basis or by means of an excess policy which, in combination with the primary policy, provides the required limits.
In the factual situation Attorney A describes, the minimum requirement apparently was met by the livery owners maintenance of both a primary policy from one insurer and an excess policy from a second insurer. Attorney A indicated that the excess insurer denied coverage based upon the failure of the insured to give notice of claim to that insurer. The applicable notice requirement would be contained in the language of the excess policy. Whether the insured breached the policys notice provisions, so as to constitute a basis for the insurers disclaimer of coverage, is a question of fact, based upon the language of the notice provision.
For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.