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Gulmire v. St. Paul Fire and Marine Insurance Co.12/23/2003
c policies in the balance, we see no overriding reason to deprive State Farm from its freedom of contract. While it is true that enforcing the exclusion in this case results in an uninsured risk for Klister, and could possibly deprive Gulmire of her legal right to be made whole, the public policy surrounding freedom of contract must overcome these considerations. If we accepted Gulmire's argument that the public policy surrounding torts should trump the insurance policy's exclusion, the implications would be enormous: any exclusion limiting the named insured's coverage would be eliminated. See Davison, 71 Wis. 2d at 641. This bizarre result would prevent insurers from ever limiting their risk by contractual terms. To avoid this absurdity, we decline to accept Gulmire's argument and conclude the exclusion meets the second part of the test. Because the exclusion passes both parts of the omnibus/exclusion test, it is valid and operates to bar coverage.
II. State Farm Umbrella Policy
. Klister's State Farm umbrella policy also does not afford coverage. The policy contains the following "business pursuits" exclusion: "We will not provide insurance ... for any loss caused by your business operations or arising out of business property."
. Gulmire does not dispute that the accident was caused by business operations. Instead, she argues an exception to the exclusion precludes its application, thereby extending coverage for the accident. This exception states: "[The business pursuits] exclusion does not apply to a private automobile ... when used for business if: (1) your underlying policy applies to the loss; and (2) the private automobile ... is not for hire either for the use of others or for carrying the property of others." However, because we conclude that the underlying insurance does not apply to the accident, the exception is inapplicable. Therefore, the business pursuits exclusion bars coverage as well.
III. St. Paul Commercial Automobile Liability Policy
A. Who Is Covered Under The Policy
. St. Paul issued a commercial automobile liability policy to Gerald Sheriff, d/b/a Fox Valley Auto Auction and Fox Valley Wholesale Company. The policy affords liability coverage to various "protected persons" for bodily injury or property damage that results from the use of a covered automobile. Under the "Who Is Protected Under This Agreement" section, a protected person includes, but is not limited to, the named insureds listed on the policy's introduction (Sheriff, Fox Valley Auto Auction and Fox Valley Wholesale) and "any permitted user." A permitted user is " ny person or organization to whom you've given permission to use a covered auto you own, rent, lease, hire or borrow." "You" is defined as any of the three named insureds listed on the introduction. It is undisputed that Klister was driving a covered automobile owned by Fox Valley Wholesale with permission at the time of the accident. Klister, therefore, is a protected person under the policy.
. St. Paul argues that even though Klister is a protected person, various exclusions-the fellow employee exclusion, the employer liability exclusion, and the worker's compensation exclusion-bar coverage. Gulmire claims the exclusions do not apply after application of "separation of protected persons" provision. Because of this provision, Gulmire argues Klister becomes a separate and distinct insured under his own policy; thus, the various exclusions will not apply. We agree.
B. The "Separation of Protected Persons" Provision
. The separation provision states:
We'll apply this agreement:
_ to each protected person named in the
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