Bus and Motor Coach Library

Where Does Your Liability End?

Author - Tom Frenkel (2003)

Attorneys are often asked to be translators.  Generally, when a client asks "Should I do this?" or "Can I do that?" we are being asked to translate statutes, regulations, ordinances, or contracts. When a difference of opinion arises, the courts are often called upon to interpret those translations. Such interpretations combine with the statutes, regulations, and other governmental standards to form what we call "law." Court interpretations sometimes turn on the meaning of a single word. This article discusses a lawsuit which involved a bus operator's contract for insurance. A trial court, and later an appellate court were called upon to decide whether passengers who were injured, after they had exited a school bus, were covered by the bus operator's contract for insurance. Whether the passengers were covered turned, in part, on the courts' interpretations of the word "occupy."

Before we get to the case, please understand that insurance law varies from one country to another, and from state to state.  Still, there are several legal principles which are commonly found.  First, a loss is "covered" only if the risk which caused that loss is somehow defined in the policy. Second, the insurance benefit is extended to an "insured," who is also defined in the policy. While this seems simple enough, courts are often called upon to determine if a particular risk is covered, for a particular person or entity. For example, let's presume that you are a bus company which purchased a policy to insure you for certain risks while carrying passengers.

In a hypothetical claim, a passenger has stumbled while walking down the aisle of your bus. The policy indemnifies you (pays for losses where you are responsible), up to certain specified limits, for any injuries which are suffered by your passengers while they are traveling aboard, boarding, or exiting your equipment.  Coverage in this matter seems clear-cut. If you are responsible for the fall, the insurance is effective. Now let's change the hypothetical a bit. What if a passenger is injured before boarding, or after exiting, your vehicle?  A recent case that comes to mind, involved a tragic accident which occurred at O'Hare Field, the primary airport serving Chicago, Illinois.  

Two school bus loads of children, teachers, and chaperones were passengers on a field trip to O'Hare.  The bus drivers activated their blinkers (as required by statute), and stopped (curbside) at a terminal entrance.

The passengers were instructed to exit the buses and, later, form a line on the sidewalk. Shortly after the passengers exited, an auto left the roadway, drove on the sidewalk, and struck several of the passengers.

The automobile insurance policy on that automobile was not adequate to pay for the injuries.

Eighteen injured passengers filed a lawsuit against the bus operator's insurer, asking the court to declare that the operator's "underinsured motorist" coverage was available to them. Underinsured motorist coverage is effective, as follows: When the driver of a vehicle injures you and that driver's liability insurance limits are not adequate to compensate you, then your underinsured motorist coverage will compensate you up to the amount that your coverage limit exceeds the other driver's.   In this lawsuit, the injured persons asked the court to declare that they had a proper claim under the bus operator's underinsured motorist coverage.

The insurance company claimed that the injuries were not covered, because the passengers had already exited the bus at the time of their injuries. The operator's policy covered "anyone occupying" the school bus. The policy defined "occupying" as follows: "Occupying means in, upon, getting in, on, out, or off." There was testimony that all passengers had exited the bus, between 30 seconds and 15 minutes before the auto drove on the sidewalk. A tour guide testified that she pushed some of the children back into the bus when she saw the auto coming. Ultimately, the trial court decided that the insurance was available to the injured passengers, as they were "getting . . . out or off" the buses. The matter was appealed by the insurance company. The appellate court examined the evidence and found that the blinkers were on, the doors were open, the passengers were in close proximity to the bus, some passengers were able to re-board, "lining up" is a normal part of the exiting process for school children, and the passengers had "actual or virtual contact" with the bus. The appellate court upheld the lower court's judgment, saying that there was a sufficient relationship between the passengers and the bus for the coverage to apply.

In a practical sense, we can all take a lesson from court interpretations such as this. Many courts have offered very liberal interpretations of relationships, which, in effect, extended remedies to injured persons. In this case, the insurer's liability did not end when the last passenger had both feet on the sidewalk. I suspect there would have been a similar result if the passengers were waiting to board, perhaps while baggage or lunches were being loaded. While this case dealt with underinsured motorist coverage, bus companies should be aware that they could potentially be sued, as allegedly responsible, whenever a passenger is injured.

Bus companies are generally held to high standards of passenger care, as transportation operators and common carriers for hire. It is a good investment of time and money to review your operating procedures with an eye toward passenger safety. And, as this case demonstrates, your passengers may not always be on board.

Thomas R. Frenkel is an attorney, licensed to practice in Illinois, Minnesota, and the District of Columbia.  Mr. Frenkel has a unique blend of legal and practical transportation and hospitality industry experience.  He is a past president of the National Tour Association (NTA), a past two-term board member of the Travel Industry Association of America (TIA), a founding member of the Hospitality Skills Standards Board (which was created under directive of the United States Department of Labor), and a member of the Transportation Lawyers Association.  Tom Frenkel was the Editor in Chief of the Southern Illinois University Law Journal.  He practices law from his office at Feirich/Mager/Green/Ryan, Attorneys at Law, a law firm which enjoys the highest ratings in both quality of legal service and quality of ethical standards by Martindale-Hubbell, an independent service which rates legal professionals.  Tom Frenkel may be contacted at FMGR, 2001 West Main Street, P.O. Box 1570, Carbondale, Illinois, USA, 62903-1570.  Phone: (618) 529-3000, email:  This magazine is proud to feature Mr. Frenkel's commentary, as a contributing writer.  This column is featured for the interest of our readers, but does not constitute legal advice; nor does any attorney-client relationship arise through its publication.