Santa Ana : Insurer of Bus Service to Seek Delay of Hearing

An insurance company that has threatened to cancel liability coverage for Taylor Bus Service Inc. of Anaheim will seek a delay of a court hearing scheduled for today in Superior Court.

Taylor provides bus service in more than 100 California school districts. Nationwide Mutual Insurance Inc. has said it will cancel insurance for Taylor on Jan. 15.

The cancellation is a result of Taylor’s failure to provide proof of its ability to pay premiums incurred since September, says Franklin V. Adams, lawyer for Nationwide.

In a lawsuit filed last week, Taylor claimed that Nationwide had refused to accept a $27,000-premium payment.

“The non-payment of the premium was not the reason for the cancellation,” Adams said Wednesday. “We canceled it because Taylor failed to fulfill a condition for renewal.”

Typical coverage for companies like Taylor involves retrospectively rated insurance policies. The contract provides for minimum and maximum payments, plus periodic adjustments in the event claims exceed expectations.

The companies that are insured routinely are required to provide some proof of ability to pay any premium adjustments that may be required.

Adams declined to describe the Taylor contract. He said Nationwide is anxious to continue the coverage but only if Taylor provides a letter of credit, a security bond or some other security instrument.

Adams said the insurance company will ask to delay Thursday’s court hearing several days to allow time for thorough preparation.