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June 30, 2016  

 
 Q&A of the Week
Vacuum Damaging a Couch

An Iowa subscriber recently asked the following question:

Our policy holder is a cleaning company. An employee put a vacuum on the couch standing up, and turned it on, and then used the hose attachment from the vacuum to clean a different section of the couch. While the employee was cleaning a different section of the couch with the hose, the vacuum bristles were spinning and damaging the section of the couch that it was standing up on. Does the exclusion in the liability policy pertaining to property damage that has to be repaired because the insured's work was incorrectly performed on it apply?


ANSWER: That exclusion will not apply since it refers to property damage to that particular part of property that has to be repaired because the work was incorrectly performed on it. The employee was not actually performing work on the section of the couch when it was damaged. So, the exclusion, being read strictly, would not apply.
How about the care, custody or control exclusion? The problem here is that the exclusion is particular to "the" insured and an employee is not an insured for property damage to property in the care of or over which physical control is being exercised for any purpose by an employee. Since the named insured is not the employee, the exclusion would not apply to the named insured either.
So, this may be a case where the details of the incident cause it to fall into the cracks between exclusions. It is a case of the employee's work damaging another's property and this is the purpose of the liability coverage.
This is presuming that the damage occurred before the employee was finished with the work and so, the damage to your work exclusion would not apply since that is only for completed operations claims.

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 What's New This Week in FC&S
Standard Homeowners Endorsements

The coverages of the standard homeowners forms (Forms HO 00 02, 03, 04, 05, 06, and 08) are designed to provide the kinds of insurance protection that most homeowners will need. Read More
 
 Litigation Watch
Car Wash Damages

The insurer brought an action seeking a declaratory judgment that it had no duty to defend or indemnify the insured car wash installer in an underlying lawsuit arising from a malfunctioning car wash. This case is Auto-Owners Insurance Company v. Southeastern Car Wash Systems, 2016 WL 3027374.

Miller operates a car wash distribution and installation business in Tennessee. Miller was insured through a general liability policy issued by Auto-Owners. Miller contracted with Evans to install and maintain a car wash unit; after installation, the car wash began to malfunction. This caused damage both to the unit and customers' autos. Evans incurred substantial losses, including damage to the car wash unit, lost income, reputational damage, and payments to customers for the damage done to their cars.
 Read More
 
 Fraud of the Week
False Claim Fraud – Washington
AMOUNT: $8,900


A Washington man pleaded guilty to one count of first-degree attempted theft and was sentenced to twenty-four hours of community service, a $1,000 fine, and $800 in court costs. Read More
 
   
 FC&S Ask the Experts
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?

Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).

Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.

Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here.
 
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FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@alm.com, to set one up! 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: 859-692-2293
Email: eAlerts@nuco.com
The Zalma Insurance Claims Library
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Insurance Claims: A Comprehensive Guide
The only source you'll need to successfully handle insurance claims from start to finish. More Info
Construction Defects Coverage Guide
Your single-source for identifying, insuring, investigating, prosecuting, and defending cases that result from construction defect claims. More Info
Mold Claims Coverage Guide
This guide will allow you to handle mold insurance claims and litigation resulting from mold or fungi related disputes with confidence. More Info
For more information about these titles Click Here
 
FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, FC&S
  Diana B. Reitz, CPCU, AAI
Consulting Editor
David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
  Emily Brunner
Online/Print/Production Editor
Susan L. Massmann, CPCU
Managing Editor, Electronic Publications
  Tosha Brinkman
Marketing Manager
Barry Zalma, Esq., CFE
Contributing Editor
  Donna Cozatchy
Creative Director

 
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