Problems viewing this email? Click Here

600px_FCS-IntelligenceTopper-New
September 25, 2014  

 
 Q&A of the Week
Personal Property of Others in Comparison with Bailees Coverage

A Connecticut subscriber recently asked the following question:

What is the difference in coverage between personal property of others and a bailees form? If I insure a small art framing shop that has $10,000 of customers goods, I would use a bailee form but I'm not sure why.

ANSWER: Property of others can be insured on the Building and Personal Property Coverage Form under section A.1.c at a similar rate as the insured's personal property. Up to $2,500 is available via the coverage extension for personal effects and property of others. Also, a separate commercial inland marine form for bailees' customers is available. The main difference is that bailees coverage generally provides property-in-transit and off-premises coverage that is not available on the Building and Personal Property Coverage Form.
 
 Litigation Watch
Liability Exclusions and Coverage for a Limited Liability Company Owner

The insurer sought a declaratory judgment as to whether it had a duty to pay a claim on a limited liability company's (LLC) commercial general liability policy based on the owner's damage to personal property caused while he was conducting work for the LLC. This case is Dakota Fire Insurance Company v. J&J McNeil, 849 N.W.2d 648 (2014).

McNeil owned and operated the LLC, an excavation and snow-removal company. The LLC owned a number of vehicles, including a Caterpillar scraper. McNeil personally owned a number of vehicles, including a 2008 Shelby GT. The Shelby had no business purposen.

In the early hours of November 2008, McNeil needed to service the scraper and mobilize it for a commercial development project. He backed the Caterpillar out of a shed and accidentally drove it over his Shelby, destroying it. McNeil made an insurance claim against the LLC's commercial general liability insurer, Dakota Fire, for the damage caused to the Shelby. The insurer filed a declaratory judgment action seeking a determination of whether its insurance policy creates a duty to pay the claim. The circuit court ruled in favor of McNeil and this appeal followed.

The Supreme Court of South Dakota said that coverage was triggered but that the court had to decide if any policy exclusions applied. The insurer argued that the "property you own, rent, or occupy" exclusion applies to the property damage since McNeil caused the damage and he owns the Shelby. The insured said that the exclusion applies only to property the LLC owns, rents, or occupies. The Supreme Court found that the exclusion plainly states that the term "you" only refers to the named insured, and the named insured in the Dakota policy was J&J McNeil, not McNeil himself. Therefore, the exclusion only refers to the LLC's property. The LLC did not own the Shelby and so, the exclusion was not applicable in this instance.
 
   
 Subscribe to FC&S
FC&S Online is the unquestioned authority on insurance coverage interpretation and anlaysis for the P&C industry. FC&S offers unbiased analysis and interpretation and keeps you current on the latest ISO and AAIS revisions. Providing instant access to the very latest information, FC&S is the resource that agents, attorneys, brokers, risk managers, underwriters, and adjusters rely on to research commercial and personal lines coverage issues.
Quickly and accurately determine coverage under a policy at the time of loss
Research coverage issues and interpretations, including court cases
Access experts live to discuss specific situations
Find answers to questions based on real-world claims disputes
View and print ISO forms
Access updates on breaking litigation and bureau developments
160px_Start-Your-Free-Trial
 
 Join Us Live!
FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@ SummitProNets.com, for more information. They only take 30 minutes, a small investment of time that will help you learn all that FC&S Online has to offer.
 
 Contact Us
As always, your comments and questions are welcome.

Contact us at:
FC&S Department
Phone: 800-543-0874
Fax: 859-692-2246
Email: eAlerts@nuco.com
 
FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, Professional Publishing
  Diana B. Reitz, CPCU, AAI
Consulting Editor
David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
  Katherine S. Caudill, J.D.
Staff Writer
Susan L. Massmann, CPCU
Managing Editor, Electronic Publications
  Karen L. Combs
Assistant to the Editors
Donald S. Malecki, CPCU
Contributing Editor
  Tosha Brinkman
Marketing Manager
Barry Zalma, Esq., CFE
Contributing Editor
  Donna Cozatchy
Creative Director
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent professional person should be sought.

To ensure future delivery of email, please add admin@list.nationalunderwriter.com
to your address book, contacts or safe sender list.

You have received this email at %%merge members_.emailaddr_%%.
Click here to unsubscribe from %%merge list.descshort%%.
©2014 Summit Professional Networks, All rights reserved. Privacy Policy
 
160px_SummitPN
4157 Olympic Blvd., Suite 225
Erlanger, KY 41018
1-800-543-0874