Delivering Anything For Compensation Excluded by Auto Policy

Vehicle While Used to Carry Sandwiches for a Charge Excluded

Auto insurance polices provide a great deal of liability insurance for a small premium. It is, usually, a bargain for the purchaser. However, like every insurance policy, the automobile liability insurance policy does not cover every eventuality.

In Cox III, LLC, and Andre Leon Queen v. Farmers Insurance Company, Inc. and Farmers Insurance Exchange, No. 336777, State Of Michigan Court Of Appeals (April 12, 2018) the insurers appealed an order granting damages to plaintiffs, Cox III, LLC, and Andre Leon Queen.


The suit arsoe after a car accident involving plaintiff, Andre Leon Queen (“Queen”), while he was delivering sandwiches for plaintiff, Cox III, LLC (“Cox III”), a Jimmy John’s franchisee. Queen hit another driver with his car, and the driver filed a personal injury lawsuit against plaintiffs. Queen’s vehicle was insured by the Farmers defendants through a policy that was issued to Queen’s father. Plaintiffs sought coverage and indemnification through the automobile insurance that Queen retained through defendant. Defendant declined to defend or indemnify plaintiffs based on exclusions in Queen’s automobile insurance policy. The exclusions essential exclusion follows:

This coverage does not apply to:

1. Bodily injury or property damage arising out of the ownership, maintenance or use of a vehicle while used to carry persons or property for a charge.

Plaintiffs alleged two causes of action in their initial complaint. The trial court found that defendant breached its insurance contract with plaintiffs.

Defendant argues that the trial court erred in granting summary disposition in favor of plaintiffs because both Exclusion #1 and Exclusion #6 preclude coverage of plaintiffs for the lawsuit that arose out of Queen’s car accident.


Defendant first argues that Exclusion #1, which excludes coverage for vehicles that are used “to carry persons or property for a charge,” is not an ambiguous provision, and that it precludes coverage of plaintiffs because the delivery of sandwiches amounts to carrying property for a charge.

The language of an insurance policy is construed and interpreted in accordance with ordinary contract construction principles. The trial court found that the language of Exclusion #1 was ambiguous because the exclusion did not appropriately define what “carrying a person or property for a charge” included, or indicate whether delivering sandwiches constituted carrying property for a charge.

The Court of Appeal has found that a similar arrangement, where an individual was paid a wage to deliver pizzas using his personal car, amounted to carrying property for a charge. Amerisure Ins Co v Graff Chevrolet, Inc, 257 Mich App 585, 596; 669 NW2d 304 (2003). In Amerisure, an employee of a company insured by the plaintiff got into a car accident while delivering pizzas. The employee’s fiancée had rented the car and placed the employee on the rental contract as a permissive user of the car. The employee was sued by the other driver.

The plaintiff and the defendant both contributed $90,000 to the settlement of the case against the employee, and the plaintiff then sued the defendant, seeking a declaratory judgment that the defendant was responsible for the payment of the entire settlement. The rental contract in Amerisure contained an exclusion that precluded insurance coverage where the car was used “to carry . . . property for consideration . . . .”

The plaintiff argued that, because the employee was “paid a wage for whatever work he did and did not receive a special wage or mileage reimbursement for carrying pizzas, he did not carry property for consideration.”  The Court found that the employee’s hourly wage constituted consideration within the meaning of the insurance policy, and “because [the employee] was hired for the purpose of delivering pizzas, his transportation of those pizzas was for consideration.”

In this case, Queen was an employee of Cox III’s Jimmy John’s franchise and delivered sandwiches in return for hourly compensation, as well as tips. With the exception of the type of food being delivered, the arrangement between plaintiffs is the same as the arrangement between the employee and employer in Amerisure.

Therefore, the language in Exclusion #1 is not ambiguous and plaintiffs are precluded from coverage because the accident occurred while Queen used the vehicle to carry property for a charge.

Accordingly, plaintiffs should not have been granted summary disposition because Exclusion #1 precludes insurance coverage for the car accident that Queen was involved in and that judgment was reversed.


This case teaches that businesses that allow employees to use their private cars to deliver product, whether sandwiches, pizza, widgets, or people (Uber or Lyft) should have them insured under a commercial insurance policy. Delivery people, using personal cars, if the employer will not insure them, must speak to their insurer about amending the policy to cover the delivery operations. Unfortunately no one reads an insurance policy until after a loss so Mr. Queen and his employer had no available coverage from Farmers.


© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Mr. Zalma’s books available as Kindle books or paperbacks at can be reached at

Mr. Zalma’s reports can be found on Tumbler at  on Facebook at and you can follow him on Twitter at

Legal Disclaimer:

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.




About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
This entry was posted in Zalma on Insurance. Bookmark the permalink.