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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. Read More
 
 What's New This Week in FC&S
Financial Institution Kidnap/Ransom and Extortion Policy

This article analyzes ISO's policy covering kidnap, ransom, and extortion exposures. Read More
 
 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 purpose.

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. 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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