Grover leased its building and personal property to Carma to use as a restaurant. Carma vacated the lease and damaged the building while taking the personal property with it. Grover filed a claim with Aspen Insurance for the stolen personal property and the damage to the building. Aspen denied coverage because the property had been entrusted to Carma at the time of the loss. Grover argued that a lease is not an entrustment so coverage should apply.

Click here to see how the courts ruled.

A restaurant is one of the most common businesses in any town and has some of the most difficult exposures to insure. They have a high rate of failure and a number of very serious property and liability exposures with several potential coverage gaps. Before contacting a restaurant, consider using the Producer's Commercial Lines Risk Evaluation System to help identify important exposures and coverage gaps.

Click here to review the Producer's Commercial Lines Risk Evaluation System restaurant narrative.

Grover covered the business personal property under his policy but he could have required that Carma provide the insurance for that property because Carma had a use interest in the property. Carma could have chosen to insure it as business personal property or as improvements and betterments. Many producers choose the business personal property route but others have found a better way to insure the more permanent items as specific improvements and betterments, which is subject to the lower building rate instead of the business personal property rate.

Click here to review the Improvements and Betterments PF&M article.

The "How To Insure" training courses in the Producer's Commercial Lines Risk Evaluation System can get you started. Becoming an expert in insuring a restaurant will take years but if you don't start, you will never be one. The "How To Insure" Restaurant course can get you started - only you can decide how far you want to go.

Click here for instructions on how to sign up for your "How to Insure" course