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October 1, 2015  

 Q&A of the Week
Damage to Property Exclusions and Scratched Glass

A Kentucky subscriber recently asked the following question:

Our policyholder is a painter. He was hired by a builder to paint the interior and exterior of a house being constructed. The painter primed all the windows (which were in place in the house) and then scratched the interior glass while sanding the window sashes and non-removable muntins. All the windows have to be replaced. We contend Exclusion J.5 of the CGL is applicable. The agent contends that the glass is a separate part and therefore the exclusion is not applicable. Is there coverage?

ANSWER: We agree with you on this. It is an interesting argument that the agent is making about the glass, but since the glass is already in the window, it is the window, and sashes and muntins are also the window. These items may be separate parts on their own, but they are now incorporated into one piece of real property and that is the window. Exclusion j5 is applicable since this part of real property has been damaged while the insured was working on it and the damage arose out of that work. Read More
 What's New This Week in FC&S
Electronic Data Liability Coverage Form

The standard CGL form specifically notes that electronic data is not tangible property, and specifically excludes coverage for damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate electronic data. Read More
 Litigation Watch
Misrepresentation, Cancellation, and Voiding of Policy

In this declaratory judgment action, the insureds appeal an order granting summary disposition in favor of the insurer. This case is Auto-Owners Ins. Co. v. Motan, Docket No. 321059, 2015 WL 5247261 (Mich. App. Sept. 8, 2015).

The litigation concerns a commercial insurance policy entered into between M&S Quick Stop and Auto-Owners Insurance. The agent for M&S contacted an independent agent indicating that he wanted to purchase insurance for M&S. The insurance agent filled out an application and the agent signed it without reviewing it for accuracy.

The policy was issued by Auto-Owners. Subsequently, after an investigation, the insurer sent a notice of cancellation to M&S based on misrepresentations in the application. M&S claimed in the application that no previous policy had been cancelled. The fact was that M&S had one previous policy non-renewed and another cancelled for nonpayment of premiums. M&S also asserted that it had no previous losses or claims when in fact, several claims had been made. And, M&S was also cited by the state for non-sufficient funds checks.
Read More
 Fraud of the Week
Vehicle Arson Fraud—Texas
AMOUNT: $20,597.08

The owner of a sub shop was sentenced to fifteen years in prison and five years of supervised release and was ordered to pay $34,000 in restitution for burning his sub shop and filing an insurance claim. 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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 Online Subscription!
FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow,, 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
The Zalma Insurance Claims Library
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.
  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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