COVID-19 Resource Center

04/12/2022

Jennifer Suh Prevails in Motion to Dismiss in Case Holding Food Delivery Apps Need Not Provide Uninsured Motorist (“UM”) Insurance Benefits

Jennifer A. Suh, a Senior Associate in the firm’s Mt. Laurel office, recently obtained a dismissal by way of Motion to Dismiss for Failure to State a Claim as to the insurance carrier for a delivery app in Essex County.

The matter involved a Plaintiff, an independent contractor of the delivery app, who made a claim for uninsured motorist (“UM’) benefits through a policy of insurance held by the delivery app.  The claim in question arose when the independent contractor was logged into the delivery app and was involved in a motor vehicle accident, while operating his personal automobile, for which he sought UM benefits.  Plaintiff alleged that the insurance policy at issue was against public policy and failed to contain mandatory minimum $15,000/$30,000 UM/UIM benefits for automobile insurance per N.J.S.A. 39:6A-3.  The policy language itself clearly indicated it was not intended to comply with N.J.S.A. 39:6A-3 and provided no UM/UIM coverage.

Attorney Suh successfully argued that the policy was a contingent liability insurance policy, not an automobile insurance policy, intended to protect the company from claims arising from third-party injuries sustained in the event that the independent contractor operating the vehicle was not properly insured.  Attorney Suh was able to persuade the Court that the sale or procurement of contingent liability insurance policies does not contravene public policy in the State of New Jersey and does not otherwise run afoul of N.J.S.A. 39:6A-3, which applies only to vehicle “owners or registered owners of vehicles” under the statute.  Thus, the duty remained with the independent contractor to ensure compliance with mandatory minimum UM/UIM insurance requirements as the delivery app does not own or register the underlying vehicle.

This dismissal ensures that future delivery app services are not bound to provide UM/UIM insurance coverage to delivery app drivers who use their personal automobiles in the course of their independent contractor operations.

Patricia Holden, a partner in the firm’s Mt. Laurel office, wrote the initial brief pertaining to contingent liability policies and Attorney Suh drafted the opposition to Plaintiff’s cross-motion, the reply brief and conducted the oral argument.

If you have any questions about this matter, please contact Jennifer Suh at JSuh@c-wlaw.com or (856) 761-3800.