In a July 11, 2025, decision, the U.S. Court of Appeals for the Seventh Circuit ruled in favor of ACE American Insurance Company in a case involving an underinsured motorist (UIM) claim by Jason Rahimzadeh, an employee of Medtronic PLC. Rahimzadeh was injured on September 11, 2020, when he was struck by a car while biking as part of Medtronic’s “Healthier Together” initiative, which encouraged employees to complete a 5K during work hours. After the at-fault driver’s insurance proved insufficient, Rahimzadeh sought UIM benefits under his personal policy and Medtronic’s commercial auto insurance policy issued by ACE.
The ACE policy, however, only provided UIM coverage to individuals defined as “insureds,” specifically those “occupying” a covered vehicle at the time of the incident. Since Rahimzadeh was on a bicycle, not in a company vehicle, ACE denied the claim. Rahimzadeh filed a lawsuit in Illinois state court alleging breach of contract, but ACE removed the case to the U.S. District Court for the Northern District of Illinois, which dismissed the claim, finding the policy’s terms unambiguous and the occupancy requirement valid.
On appeal, Rahimzadeh argued that the occupancy requirement violated Illinois public policy and requested the Seventh Circuit to certify the question to the Illinois Supreme Court. The appeals court affirmed the dismissal, holding that the occupancy requirement in commercial auto policies is permissible and does not contravene Illinois public policy. The court distinguished this case from those involving personal auto policies, noting that commercial policies have more flexibility to set strict coverage boundaries. The court also declined to certify the question, finding no uncertainty in state law. This ruling underscores the importance of clearly defined coverage terms in commercial auto insurance policies, particularly for employees not occupying company vehicles at the time of an accident.