General Liability policies are the workhorse for protection for many businesses. It is easy to forget that it IS to protect an insured’s liability for harm to third parties and their property. Our case at hand revolves around how, essentially, property ownership can be redefined.

A general liability policyholder sued his insurer after it denied responsibility for serious property damage that occurred while he was performing welding work. A major stumbling block arose because of how the status of the property was altered in relation to the policyholder’s efforts.

Click below for more information on whether the welder was eligible for coverage for the severe damage resulting from his work.

Insurance policies operate properly when they respond to losses they are designed to cover. The issue between the welder and the damage to the client's equipment was due to how the former party’s insurance policy defined property.

The general liability policy included language that excluded coverage. Specifically, it was in the form of a care, custody, or control provision. Unfortunately for the insured, the policy exclusion clearly barred coverage for the loss because, as he worked on the property to attempt repairs, it was treated as if he owned the property. Coverage didn’t apply since damage to one’s own property is ineligible under a liability form, which is designed to protect third-party situations. Care, Custody, or Control situations are merely among a variety of excluded scenarios.

Click here for additional information on items that are commonly barred from protection under a general liability policy. It is from the Commercial General Liability Section of PF&M found in Advantage Plus.

In this newsletter edition’s case, the plaintiff held the position that the loss should have been covered. Two separate courts focused on whether the policy’s Care, Custody, or Control (Three C’s) exclusion language was applicable.

In our opinion, the court’s focus was surprising. Significant time was spent to determine whether care, custody, or control of the property was present. They concluded that only care was present. They also affirmed what should have been obvious from merely reading the exclusion. The reality was that only a single element could trigger its application.

Considering that both the insured and, at least initially, the courts were confused about care, custody, or control, more information could be helpful.

Click here for an analysis of the meaning of the terms included in the care, custody or control exclusion. It is also located in the Commercial General Liability Section of PF&M, found in Advantage Plus.

Although it is not ideal, litigation can provide valuable insights, even though it often results in the intense use of money and time. In this instance, agents, policyholders, and insurers are reminded that we are all best served by providing more complete and sufficient insurance and risk programs.

Court cases have a tendency to focus our attention on winning or losing in the litigation arena. Insurance professionals can benefit from broadening their perspective. Frankly, resorting to judges and juries to resolve insurance issues is, too often, a failure. Lawsuits typically arise due to poor communication, inadequate analysis of loss exposures, and/or a lack of awareness.

Specifically, an artisan performing risk-filled work at a remote site was not adequately protected from a risk that should have been relatively easy to recognize. Persons such as welders and others who are routinely hired to make repairs or modifications to property belonging to third parties also routinely care for, have custody of, or control that property.

There are ways to address the serious coverage gap presented by a General Liability policy, which includes care, custody, and control exclusions. Insurance experts are truly professionals when they assist in identifying and providing means to address risks. Doing so with insurance is a good thing, but proper service often means sharing expertise to minimize risks by other methods, such as contractual, loss control or avoidance.

Click here for an excerpt from a source that helps you discover brokers and insurers offering coverage for exposures that can be difficult to place. It is from Insurance Marketplace found in Advantage Plus.