222.4-2

GARAGE COVERAGE FORM ANALYSIS—CA 00 05

(July, 2007)

Garage operations are somewhat unusual. The lines between their general liability and automobile liability exposures blur and overlap in some areas. The garage policy was developed to provide broad protection against both a firm's general liability and automobile liability exposures in one coverage form. It is also intended to prevent gaps and overlaps. The Garage Coverage Form contains premises liability coverage, products liability coverage, automobile liability coverage, and physical damage protection to vehicles. Endorsements are available to make the Garage Coverage Form’s protection more comprehensive.

For a complete list of endorsements, please refer to PF&M Section 222.4-3, Garage Available Endorsements And Their Uses.

GARAGE COVERAGE FORM ELIGIBILITY

Any commercial or business venture with an auto liability and/or physical damage exposure is eligible for one of the business auto coverage forms. Each of the business auto coverage forms may be used as stand-alone monoline policies or as a coverage part in conjunction with a Commercial Package Policy (CPP). Four coverage forms exist that combine both liability and/or physical damage, while an additional physical damage only form is available. One of the five coverage forms should be able to meet the needs of any commercial operation.

Those operations that should be protected with the Garage Coverage Form—CA 00 05 include both franchised and nonfranchised auto dealers, truck dealers, motorcycle dealers, snowmobile and recreational vehicle dealers, new and/or used, franchised and nonfranchised trailer dealers, repair shops, service stations, storage garages and public parking places.

POLICY CONSTRUCTION

The make-up of a garage policy must contain more than just the Garage Coverage Form. To complete an ISO Garage Policy, there must be:

·         Common Policy Declarations

·         Common Policy Conditions

·         Garage Declarations

·         Garage Coverage Form

·         Endorsements

The following is an analysis of the Insurance Services Office (ISO) Garage Coverage Form—CA 00 05. A recap of each section of the CA 00 05 will be reviewed and, where possible, examples and relevant court cases will be referenced.

Note: In addition to the policy conditions built into the Garage form, the policy is also subject to the common policy conditions found in IL 00 17, which are not included in this analysis.

Section VI—DEFINITIONS contains defined words. Defined words have been placed in quotation marks.

SECTION I—COVERED AUTOS

SYMBOLS

The coverage form begins with covered "auto" symbols. In order to determine which "autos" are considered covered "autos" for each of the coverages provided in the policy, numerical symbols are used. These symbols correspond to a definition to specify what is a covered "auto."

In the declarations, there is a place to show a symbol or symbols next to the liability, garagekeepers and physical damage coverages. Only those coverages that have a symbol(s) shown in the declarations are applicable and only those "autos" as designated by the symbol(s) are covered "autos" for that coverage.

A. Description Of Covered "Auto" Designation Symbols

The Garage Coverage Form has the eleven symbols developed specifically for the types of "autos" and exposures inherent to a garage operation. These symbols are as follows:

21 = Any "Auto" - Symbol 21 is the broadest of all the symbols, and as it states, it provides the insured with the designated coverage for any "auto."

22 = Owned "Autos" Only - This symbol triggers coverage for "autos" that are owned by the insured. It also applies to any "auto" the insured has acquired after the policy begins. An extension of the definition of owned "autos" is made for liability coverage with respect to a "trailer." Regardless whether a trailer is owned by an insured, if it is attached to an "auto" or power unit owned by the insured, it qualifies as an owned "auto."

23 = Owned Private Passenger "Autos" Only - Use of this symbol triggers coverage for private passenger type "autos" that are owned by the insured. It also includes any private passenger type "auto" the insured acquires after the policy begins.

24 = Owned "Autos" Other Than Private Passenger "Autos" Only - This symbol triggers coverage for "autos" that are owned by the insured, as long as they are not in the private passenger class. It also includes any non-passenger type "auto" an insured may acquire after the policy begins. An extension of the definition of owned "autos" is made for Liability Coverage for any "trailer." A trailer, as long as it is attached to a qualified (non-private passenger) "auto" or power unit owned by the insured, is also considered an owned "auto." This is true, regardless whether the insured owns the trailer.

Example: Paula's Pre-Owned Auto Palace is insured under a Garage Policy. The Auto Palace also performs auto repairs. A new Auto Palace mechanic travels to several junkyards to buy some used equipment and parts. He takes a one-ton stake truck with him. By the time the mechanic gets to the last junkyard, his truck is well-loaded. However, this last stop is where he needs to pick up an engine block that is needed at Paula's today. The junkyard owner loads the engine block onto one of his trailers and attaches it to the Auto Palace truck. As long as that trailer is attached to the Auto Palace truck, it is considered to be owned (and covered) under the Auto Palace policy.

25 = Owned "Autos" Subject To No-Fault - When this symbol is used, it triggers coverage for "autos" that are owned by the insured and are also required to carry any No-Fault insurance or benefits in the state that the "autos" are principally garaged. This also includes any "autos" the insured has acquired after the policy begins that are also subject to the no-fault requirements or benefits of the state where the "autos" are principally garaged.

26 = Owned "Autos" Subject To A Compulsory Uninsured Motorists Law - Use of this symbol triggers coverage for "autos" that are owned by the insured and are also required to carry uninsured motorists coverage (without the option of rejection), in the state that the "autos" are principally garaged. This includes any "autos" the insured has acquired after the policy begins, if they are also subject to the mandated uninsured motorists coverage.

27 = Specifically Described "Autos" – Use of this symbol allows the insured to select those "autos" that coverage is needed for on an individual basis. Only "autos" specifically listed in Item Nine of the Declarations qualify for coverage. No automatic coverage extends to newly acquired "autos" when this symbol is used. Each new "auto" must be endorsed onto the policy. With respect to liability coverage, "trailers" are covered as long as they are attached to a listed vehicle.

28 = Hired "Autos" Only - This symbol provides coverage for "autos" that the insured has leased, hired, rented or borrowed. No coverage for owned "autos" is provided.

Note: This symbol has another, significant limitation. Any "auto" that the insured has leased, hired, rented or borrowed from any employee, partner or member of an employee’s or partner’s household is ineligible for coverage.

29 = Nonowned "Autos" Used in Your Garage Business - Any "auto" that is not leased, hired, rented or borrowed by the insured, that is also used in the insured’s garage business as stated in the declarations, is covered. This symbol also will cover those "autos" that the insured has leased, hired, rented or borrowed from any employee, partner (when the insured is a partnership), member (when the insured is a limited liability company) or member of an employee’s or partner’s household.

Example: Paul had just started his job at The Friendly Garage and was learning the ropes. So, when his boss asked that he make the deli run for lunch, he was all for it. The boss and eight other employees put in orders. Paul called them in and then headed out to pick them up. As he was returning with the items, a drink lid popped off and he bent over to readjust it. At that same moment, the car in front of him stopped. He plowed into the car which set off a chain reaction, eventually damaging six vehicles. All drivers brought claim against Paul and The Friendly Garage (once they learned Paul was traveling on company business). The owner of Friendly Garage and his insurance company are still arguing over whether the lunch run qualifies as being part of their garage business.

30 = "Autos" Left With You for Service, Repair, Storage or Safekeeping - When a customer leaves an "auto" with the insured’s "garage operation" for service, storage or safekeeping, use of this symbol will provide coverage for those customers’ vehicles. In this context, “vehicles” refer to a land motor vehicle, trailer or semitrailer. The meaning of "customer" has been extended to include any employee or employee’s family members who pay for the services performed by the insured.

31 = Dealers "Autos" (Physical Damage Coverage) - This symbol provides coverage for "autos" belonging to auto dealers. However, such vehicles are only eligible when a proper description appears in the place reserved in Item Seven of the Garage Declarations.

Several considerations on the use of symbols should be explored. In some cases, more than one symbol may be used.

Example: Regarding liability coverage, the insured may wish to have all private passenger vehicles covered, as well as any hired or nonowned vehicles, so symbols 23, 28 and 29 would be shown next to the liability coverage on the declarations page. However, if symbol 21 is used for liability, no other symbol is needed, as 21 covers any "auto."

Symbol 21 is the broadest of all the symbols, providing coverage for any "auto." This symbol may be used for liability only. Because of the degree of protection this symbol offers, however, many insurers use it judiciously.

Symbols can be different for coverage within the same policy. Symbol 21 may be used for liability, but symbol 27 is used for physical damage coverages.

Manuscript Symbol - Though not mentioned in the coverage form, a manuscript symbol is available by endorsement CA 99 54—Covered Auto Designation Symbol. For the business auto coverage form, manuscript symbol 32 is available. A complete description of the "autos" that are to be considered covered "autos" must be shown in the endorsement.

Example: An insured wants liability coverage for all of his owned vehicles and physical damage coverage on all owned vehicles except a collection of very high value antique cars. For physical damage purposes, the antique cars are in a specialty market and have their own policy for the physical damage coverages. Symbol 21 is used to designate the covered autos for liability coverage and Symbol 32 is used to designate the covered autos for other-than-collision and collision coverages. The definition used for Symbol 32 is: All owned autos except the collection of antique cars covered by policy CAXXXXXXX.

If you are interested in a legal point of view, please refer to PF&M Section 220_C007, Garage Liability Coverage Held Clearly Defined By Choice Of Numerical Symbols, in Court Cases.

For insurers and brokers that have access to coverage for a variety of difficult business auto, garage or trucking situations, refer to the section for Automobiles, Trucks or Recreational Vehicles in The Insurance Marketplace, published by The Rough Notes Company, Inc.

B. OWNED AUTOS YOU ACQUIRE AFTER THE POLICY BEGINS

1. If the symbols 21 = Any Auto, 22 = Owned Autos Only, 23 = Owned Private Passenger Autos Only, 24 = Owned Autos Other Than Private Passenger Autos Only, 25 = Owned Autos Subject To No-Fault or 26 = Owned Autos Subject To A Compulsory Uninsured Motorists Law are used for coverages as shown in the declarations, then "autos" acquired by the insured during the policy period, of the type described by the symbol, are also covered.

If Symbol 23 (Owned Private Passenger Autos Only) is used and the insured purchases a new private passenger vehicle during the policy period, coverage is automatic. However, if Symbol 24 (Owned Autos Other Than Private Passenger "Autos" Only) is used and the insured purchases the same private passenger vehicle, there is no automatic coverage. The insured would have to specifically request coverage for this vehicle to be added and change the policy symbol.

When Symbol 27 (Specifically Described Autos) is used, coverage for newly acquired "autos" within the policy period may be covered if the insurer either covers all the vehicles that the insured already owns or the new vehicle is a replacement for a vehicle already scheduled, and if the insured notifies the insurer within 30 days of the acquisition of the new vehicle regarding the coverages or changes desired.

C. CERTAIN TRAILERS AND TEMPORARY SUBSTITUTE AUTOS

When liability coverage has been selected in the declarations, several additional categories of vehicles are considered covered:

"Trailers" of the utility type that have a load capacity of 2,000 pounds or less and which have been designed for travel on public roads are covered while being towed by a covered "auto."

Example: A semi-trailer is not covered; however, the liability for a utility trailer which the insured rented in order to transport a piece of machinery is covered while towed by an "auto," as long as the load capacity is under 2,000 pounds.

When a covered, owned "auto" of the insured is temporarily out of service due to breakdown, repair, servicing, loss or destruction, then the nonowned, temporary substitute is covered if the insured is using it with the proper permission of the vehicle owner.

Example: Scenario one - Greatful Garaging's autos are all insured under a Garage Policy and their small fleet of marketing rep cars are insured using Symbol 22 (Owned autos). Karl, a Greatful marketing rep, has to drive to another state on business but doesn't trust using his company car for the long-distance trip. The company vehicle assigned to him is old and has recently suffered mechanical problems. Karl decides to rent a car for the trip. In this case, Karl's rental is not automatically covered.

Note: Cars that are temporary substitutes for owned vehicles that are being repaired or serviced (maintenance) would qualify for coverage.

Example: Scenario two - Greatful Garaging's autos are all insured under a Garage Policy and their small fleet of marketing rep cars are insured using Symbol 22 (Owned autos). Karl, a Greatful marketing rep, has to drive to another state on business but, shortly after beginning the trip, his company car breaks down. Karl decides to rent a car to continue the trip. In this case, Karl's rental is automatically covered as a substitute for his regular company car.

SECTION II—LIABILITY COVERAGE

A. COVERAGE

Two liability coverages are provided in the garage liability coverage portion of the coverage form. They include:

"Garage Operations"—Other Than Covered "Autos"

This coverage obligates the insurer to pay for "bodily injury" or "property damage" that is accidental. However, they must also be related to an "insured’s" "garage operations." Not covered under this portion of the coverage form are any damages that result from the ownership, maintenance or use of a covered "auto."

The insurer has the right and the duty to defend any "suit" that is made under the Garage policy. The insurer may at any time and at the insurer’s discretion, investigate or settle any claim or "suit." The insurer can terminate its defense of a lawsuit if either it settles the case, or pays a judgment that uses up the policy’s stated "Garage Operations"—Other Than Covered "Autos" Limit of Insurance.

Coverage depends upon the insured’s level of knowledge regarding a possible loss. In order to qualify for coverage, an “accident” has to occur in the “coverage territory” and the “bodily injury” and “property damage” must occur during the policy period.

The "bodily injury" and "property damage" liability does not apply to a known loss. A loss is considered to be known if either an insured or an insured’s employee were aware of a loss before the policy’s inception date. However, the note about an employee only extends to one who has a responsibility (authority) to handle accident or claim notices.

Example: Jamie Pail works for Ambiguous Garaging. He handles customer personal property that is lost or found on the premises. Jamie knows about a large metal waste container that has a broken wheel that makes it tip over unexpectedly. He’s known about it for a few weeks and he just picks it up when it falls over. He never mentions it to any parking attendants or the shift supervisors. On Feb. 11^th, an attendant rounds a corner while parking an insured’s BMW. As he makes the turn, the heavy waste container tips over, smashing against the side the car. The impact startles the attendant, causing her to lose control and the vehicle smashes into Jamie’s Lost and Found Office. Chargmore Insurance Company, which has just issued a policy on Feb. 1, tries to deny coverage when they find out that Jamie knew about the hazardous container. Ambiguous Garaging’s owner changes the insurer's decision when he points out that, while it would have been nice if Jamie had mentioned the problem, his duties did not include responsibility for such matters.

Another facet of a known loss extends to knowledge of a claim that begins before a policy effective date and continues through that date. Finally, a loss circumstance that occurs before a policy period and then either re-occurs or changes in scope after the policy period begins, is considered to be a known loss. Such losses would be disqualified for coverage. This is consistent with the fact that insurance policies are meant to protect against fortuitous events. Allowing coverage to an insured who buys insurance to handle a loss he or she already knows about is not fair to an insurer.

“Bodily injury" or "property damage" qualifies as known by the insured (or authorized "employee"") when:

·         any insurer receives notice of any injury or damage

·         an insured receives any demand or claim for damages

·         any moment at which an insured becomes aware that injury or damage has occurred or has begun to occur

The coverage provided under this portion of the liability coverage is similar to that of the Commercial General Liability Coverage Form—CG 00 01. It is meant to provide premises and products liability coverage for "garage operations." For a detailed analysis of the CGL, please refer to PF&M section 270.4-2, Commercial General Liability Coverage Form Analysis.

The second portion of the liability coverage under Coverage A of the garage coverage form is:

"Garage Operations"—Covered "Autos"

This portion of the liability coverage responds to eligible "bodily injury" or "property damage" that involves the "insured’s" "garage operations" and the ownership, maintenance or use of a covered "auto.” This section also makes the insurer responsible for paying for certain losses and expenses related to pollution. This coverage only applies to such losses that are part of a covered accident.

Example: Greystoke Auto Dealers own a shuttle that transports customers who have left their cars with Greystoke for service. Just as the Greystoke Shuttle exits the parking lot, it slams into an SUV. The other vehicle is upended and, as it falls over, its gas tank ruptures, spraying fuel all over the street, sidewalk and the storefront of a neighboring restaurant. The city sues Greystoke for the expense of cleaning up gas residue, and the restaurant sues for the cost of removing gas smells from its awning, tablecloths and furniture. These would be covered losses.

Let’s slightly change this scenario.

Example: Greystoke Auto Dealers own a shuttle that transports customers who have left their cars with Greystoke for service. Just as the Greystoke Shuttle exits the parking lot, it slams into an SUV. The shuttle driver gets his customers off the vehicle and then rushes out onto the street. The shuttle’s wrecked engine catches fire, so he removes a full, spare gas can from the rear of the shuttle. He places the can on the sidewalk and later, forgetting it’s there, he trips over it and falls. Since it takes him a minute to recover, the can, which had a loose cap, spills all five gallons of gas onto the sidewalk and into a sewer drain. The city sues Greystoke for the expense of cleaning up gas residue. This would not be a covered loss.

The insurer’s defense obligation is identical to the one found above in "Garage Operations"—Other Than Covered "Autos"

This portion of the liability coverage is very similar to that provided in the Business Auto Policy for the ownership, maintenance or use of covered "autos."

For a detailed discussion of this coverage, please refer to PF&M section 220.4-2, Business Auto Coverage Form Analysis.

1. WHO IS AN INSURED

The following are insured for covered "autos":

• The named insured.
• Anyone else using a covered "auto" that is owned, hired or borrowed by the named insured and who is operating with the insured’s permission is an insured except:

a. The owner or anyone else that the insured has hired or borrowed a covered "auto" from is not covered. In other words, if the insured rents a car from a rental agency, the rental agency is not considered an insured. The exception to this is any "trailer" connected to a covered, owned "auto."

b. Employees of the insured are not covered if the employee or members of the employee’s household own the “auto.” So when the insured borrows an employee's car to pick a client up at the airport, the employee is not considered an insured.

c. Anyone using a covered "auto" while working in the business of selling, servicing, repairing, parking or storing "autos" is not covered unless that business is the insured’s. To illustrate, when an employee borrowed a company vehicle to use one night in that employee's part-time auto repair business, that employee was not considered an insured.

d. An insured business’ customers. However this coverage is limited to the amount required by the applicable jurisdiction for customers who are either uninsured or who are underinsured.

e. Partners of the insured (if the insured is a partnership) and members (if the insured is a limited liability company) are not covered if the partner or members of the partner’s household own the “auto.” When a partner borrows a spouse’s car for company business, the spouse is not considered an insured. Anyone that is held liable for the conduct of an insured is also considered an insured, but only to the extent of that liability for the insured.

Partners (if the insured is a partnership), members (if the insured is a limited liability company), employees, directors or shareholders of the insured, but only with respect to the scope of their duties pertaining to the covered "garage operation," are insured.

• Parties who have a legal obligation involving the actions of an eligible insured. The policy wording states that any protection is limited to such a party’s actual level of liability for such conduct. However, that could be mis-leading. Imagine an instance where a person or organization may have a valid, vicarious liability that is determined to be above the limit written on the policy. This wording could create confusion about available coverage.
• Employees of the insured that are performing some errand or duty for that insured, but only when using a vehicle that, from the insured’s standpoint, is neither owned, leased, rented, nor borrowed.

Example: Jim is the body shop manager for Marshall’s New Motors. Lana Marshall asks Jim to pick up her daughter from the airport. Jim takes his own car and picks her up. On the way to the Marshall’s home, Jim hits a pedestrian. The injured person sues Jim and Marshall Motors. Both would qualify as insureds in this loss.

Note: This coverage was previously provided only by adding endorsement CA 99 33—Employees as Insureds.

An endorsement is available to add coverage should an employee hire an auto in their own name as an individual to perform business-related duties and activities for his/her employer. The endorsement is CA 20 54—Employee Hired Autos. This form modifies the definition of Who Is An Insured to also include the "employee" while operating the vehicle that is owned or rented in that employee’s name.

For a complete list of optional coverage forms, please refer to PF&M Section 222.4-3, Garage Available Endorsements and Their Uses.

2. COVERAGE EXTENSIONS

Six supplementary payments are part of this coverage form. They are in addition to the dollar amounts stated in the Limits of Insurance. These apply to any claim or "suit" the insurer defends. They are as follows:

• All expenses the insurer incurs are covered. This item clarifies that the limit of insurance is not reduced by the insurer’s expenses.
• If a bail bond is required because of accidents or traffic law violations based on the use of any vehicle covered by the bodily injury liability coverage, up to $2,000 is available for the cost of such bonds. Special notation is made to clarify that the insurer is not responsible for furnishing these bonds.
• Cost of bonds needed to release attachments is provided for when a suit is filed against the insured, if the amount of the bond is within the applicable policy limit. Again, clarification is made that the insurer is not responsible for providing the bonds
• If the insurer asks the insured to help with any investigation or defense, his or her reasonable expenses are reimbursed. This includes any actual loss of earnings, up to $250 a day, if the insured must take time off work.
• All costs taxed against the insured in the "suit," cases where the court assesses the costs and expenses of the trial against the negligent party are covered. This supplementary payment can provide some extensive benefits, over and above the policy limits.
• Interest on the amount of the judgment against the insured, that has accrued after the judgment has been entered, but before the insurer has paid the judgment or the policy limits, is covered in full.

Out-of-State Coverage Extensions

When an insured is away from the state where the "auto" is licensed or garaged, two very important coverage extensions are provided. These extensions make the insurance provided by the garage policy comply with any state financial responsibility law, no-fault or other compulsory coverage. The two extensions are as follows:

1. The limit of liability provided is automatically increased, as necessary, to meet the limits specified by a state compulsory or financial responsibility law of the jurisdiction where the covered "auto" is being operated.

Note: This extension does not cover or comply with any law that governs motor carriers of passengers or property.

Example: A garage policy has a single liability limit of $50,000. This limit complies with the financial responsibility laws of the state where the vehicle is licensed and garaged, but when the "auto" crosses the state line into the next state, that limit is inadequate. The second state requires a limit of at least $75,000. This extension will automatically increase the limit, without further endorsement, to $75,000 for the temporary period the covered "auto" is being operated in the second state.

2. The second part of the extension indicates that this policy will provide the minimum amounts and types of other coverages, such as no-fault, that are required by the jurisdiction where the covered "auto" is being used.

Example: The state where the covered "auto" is garaged and licensed does not require no-fault coverage, but when the vehicle crosses into the second state, no-fault coverage is required. With this extension, during the period the "auto" is operated in the second state, the garage coverage form provides the coverage as required by that state.

Note: The policy wording states that the insurer will not pay anyone more than once for the same elements of loss because of the extensions provided. In other words, the extensions do not duplicate any coverage nor do they allow for the collection of damages more than once.

B. EXCLUSIONS

The following exclusions are found in the garage coverage form. Where applicable, information is provided on ways protection may be available, such as purchasing a separate endorsement (or if another part of the policy applies).

1. Expected or Intended Injury—Except for any "bodily injury" that may result from reasonable force used by any insured to protect or defend any person or property, any "bodily injury" or "property damage" that the insured expects or intends to cause, is not covered by this insurance.

The purpose of this exclusion is to protect insurers from being called upon to respond to damages or injuries that an insured intentionally caused. This exclusion is in the public interest to make sure an insured is not using the insurance contract for gain (such as theft), to inflict injury to competitors, using it as an instrument of revenge or to cause any other purposeful harm.

There are no current ISO endorsements available to buy back or delete this exclusion.

2. Contractual: Damages for "bodily injury" or "property damage" that result from liability the insured has assumed in a contract or agreement, are not covered unless either the contract or agreement is considered to be an "insured contract," or if the insured would have been liable even if the contract or agreement had never occurred.

There are no current ISO endorsements available to buy back or delete this exclusion.

3. Workers Compensation: This insurance does not apply to any requirement or obligation that the insured must assume resulting from any workers compensation, disability benefits, unemployment compensation or similar type laws. The extent of this exclusion and the one that follows is to prevent double indemnification for injury that should be covered under workers compensation or employers liability policies.

For insurers and brokers that have access to coverage for a variety of difficult, unusual or specialty Workers Compensation situations, refer to the section for workers compensation in The Insurance Marketplace, published by The Rough Notes Company, Inc.

4. Employee Indemnification and Employers Liability: Excluded is any "bodily injury" to an employee of the insured, or the spouse, child, parent, brother or sister of that employee, as a consequence or result of employment of that employee by the insured.

This exclusion applies whether the insured is liable as an employer or in any other capacity; or whether the insured is obligated to share damages with or repay someone else, who must pay damages because of the injury. This is a particularly important clarification because of the widespread use of contractors, subcontractors, independent contractors or leased employees, and much of the uncertainty with respect to who is responsible when such persons are injured.

There are two exceptions to this exclusion: any "bodily injury" to domestic employees who are not entitled to workers compensation benefits are covered, and liability assumed by the insured in an "insured contract" is covered.

5. Fellow Employee: Excluded is any "bodily injury" to any fellow employee of the insured that occurs as a result of, or in the course of, that employee’s employment. This exclusion complements exclusions number 3 and 4 which states that injury to an employee during the course of employment or as a result of employment is not covered, even if caused by a fellow employee.

The Fellow Employee Exclusion can be modified in two ways. By attachment of endorsement CA 20 55—Fellow Employee Coverage, an employer may delete the fellow employee exclusion for all employees. By attaching CA 20 56—Fellow Employee Exclusions For Designated Employees/Positions, an employer may delete the fellow employee exclusion for specific employees or specific positions.

6. Care, Custody or Control: "Property damage" or "covered pollution cost or expense" involving any property owned or transported by the insured or in the insured’s care, custody or control is excluded, except for liability assumed under a sidetrack agreement.

The garage coverage form is intended to protect the insured for negligence and tort liability to others; it does not apply to damages or injury suffered by an insured. As such, it reinforces the need of the insured to maintain their own premises and properties in good condition and use reasonable care to prevent damage or injury, including damage to property in the insured’s care, custody or control. However, if liability is assumed in a "sidetrack agreement" for property loaned to the insured or for personal property in the care, custody or control of the insured, the exclusion does not apply, so there is coverage.

A "sidetrack agreement" is one between the owners of a premises and a railroad with respect to a railroad sidetrack (transfer or access track) on the premises of the insured. The railroad will allow use of the sidetrack as long as the property owner guarantees access by the railroad to the sidetrack and agrees to certain conditions of property maintenance. It may also contain hold-harmless provisions between the railroad and property owner.

The ISO garage policy does not have an endorsement to cover items in the insured’s care, custody, control or transported by the insured. However, inland marine insurance may be purchased for cargo, transportation or motor carrier coverage on the property of customers or clients. There are various forms of these coverages available through ISO and AAIS (American Association of Insurance Services), as well as company specific forms, depending on the needs and operations of the insured. For specific analysis, please refer to PF&M section 142.2, Bailees Customers Policy

7. Leased Autos: if a covered "auto" has been leased or rented to another party, there is no longer any protection under the garage coverage form for that "auto." An exception to this exclusion is for "autos" that are rented to customers of the insured while their "autos" have been left with the insured for servicing or repair. There are no current ISO endorsements available to buy back this coverage or to delete this exclusion.

8. Pollution Exclusion Applicable To "Garage Operations"—Other Than Covered Autos: To get a better understanding of what pollution is, we will first look at Section VI—Definitions. That section identifies pollution as: any solid, liquid, gaseous or thermal irritant or contaminant. Elements such as fumes, smoke, acids (and their fumes), vapor, soot, alkalis, chemicals and waste; are all pollutants. All facets of waste are another type of pollutant, even if they exist in some phase of recycling or reclamation.

ISO uses a very broad definition for this exclusion, excluding virtually every type of potential occurrence, regardless whether the event is accidental or gradual. Incidents of pollution are not covered by the garage form.

The garage form excludes BI and PD related to the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

·         from any premise or site ever owned, occupied or controlled by any insured;

·         from any premise, or location that is or was used by anyone for handling, storing, disposing, processing or treating waste;

·         which were ever transported, handled, stored, treated, disposed of or processed as waste by any insured or any other party;

·         at or from any location that the insured or persons with any working relationship with the insured are working or performing operations, where such persons have brought pollutants onto that location or from any location that the insured or persons with any working relationship with the insured are working or performing operations, where such persons are working or performing operations to test for, monitor, cleanup, remove, contain, treat, detoxify, neutralize or in any way respond to or assess the effect of pollutants.

This coverage form does not apply to any loss, cost or expense resulting from any request, demand, order or statutory or regulatory requirement requiring the insured or any other to test for, monitor, cleanup, remove, contain, treat, detoxify, neutralize or in any way respond to or assess the effect of pollutants. The exclusion further states that insurance does not apply to any claim or suit by or on behalf of a governmental authority for damages because of any of the above stated circumstances.

Several potential pollution events are exceptions under the pollution exclusion. One is "bodily injury" or "property damage" which results from heat, smoke or fumes (from a hostile fire). Another covered situation is soot, fumes, vapor or smoke from equipment (that heats, cools or reduces humidity) and a third exception involves pollutants brought onto the premises by contractors working for the named insured. Hostile fire is defined in the pollution exclusion to mean any fire that has become uncontrollable or breaks out from where it was intended to be. For more information on this peril, please refer to PF&M Section 130.6-3, Fire-A Discussion. For several court examples relating to pollution, please refer to PF&M Section 270.6-14, Pollution In The Court.

Note: This exclusion also extends to any related expenses created from any claim involving pollution as well as any requirement from the authorities or other parties for an insured to handle any consequences stemming from such an event.

We recommend two other related discussions. Please refer to PF&M Section 270.6-3, Pollution Exclusion and Limited Coverage. Also please refer to PF&M Section 276.4-2, UST (Underground Storage Tanks) Coverage Form Analysis.

For insurers and brokers that have access to coverage for a variety of difficult, unusual or specialty pollution situations, refer to the section for Environmental Risks in The Insurance Marketplace, published by The Rough Notes Company, Inc.

9. Pollution Exclusion Applicable To "Garage Operations"—Covered Autos: Excluded is any "bodily injury" or "property damage" that arises out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants:"

a. that are being transported, towed by, handled or handled for movement into, onto or from a covered "auto”; that are otherwise in the course of transit by or on behalf of the insured; or being stored, disposed of, treated or processed in or upon a covered "auto." This includes any "pollutants" that are contained in any property during any of the previously mentioned conditions. There is an exception to this portion of the exclusion. This item does not apply to fuels, lubricants, fluids, exhaust gases or other similar "pollutants" needed for or as a result of the normal electrical, hydraulic or chemical function of the covered "auto" or its parts; if the "pollutants" escape, seep, migrate or are discharged, dispersed or released directly from an "auto" part designed by the manufacturer to hold, store, receive or dispose of such "pollutants." In other words, an exception exists for damage or injury caused by accidental release of regular automotive operating fluids.

b. before the "pollutants" or any property containing the "pollutants" are physically moved to the point or place where it is accepted by the insured to be moved into or onto the covered "auto."

c. after the "pollutants" or any property containing the "pollutants" are moved from the covered "auto" at the point of final delivery by the insured.

The exclusions shown in paragraphs b and c do not apply to any "accident" that occurs away from a premises owned by or rented to any insured with respect to "pollutants" not in or upon a covered "auto" if the "pollutants" or any property containing the "pollutants" are upset, overturned or damaged as a result of the maintenance or use of a covered "auto" and the discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused directly by that upset, overturn or damage.

One endorsement is available to provide a buyback for Pollution Coverage under a Garage Policy: CA 99 55—Pollution Liability—Broadened Coverage for Covered Autos—Garage Coverage Form. Using this endorsement changes the pollution exclusion for liability in the coverage form by excluding only the liability assumed under a contract or agreement. This endorsement is not applicable in Maine. Any additional charge for the use of this endorsement is at the discretion of the insurer.

For a complete list of endorsements that apply to the Garage Policy, please refer to PF&M Section 222.4-3, Garage Available Endorsements and Their Uses.

Though it is not related to a garage operation, for insight to an interpretation of an absolute pollution exclusion, please refer to PF&M Section 270_C099 "Absolute Pollution Exclusion Held Applicable To Allergic Reaction To Paint And Glue Fumes" in Court Cases.

10. Racing: No coverage exists under the Garage Policy for any covered "auto" while it is used in, practicing for or being prepared for any professional or organized racing, demolition contest or stunting activity.

There are no current ISO endorsements available to buy back or delete this exclusion.

For insurers and brokers that have access to coverage for a variety of difficult business "auto" or trucking situations such as racing activities, refer to the section for Automobiles, Trucks or Recreational Vehicles in The Insurance Marketplace, published by The Rough Notes Company, Inc.

11. Watercraft or Aircraft: Excluded is any coverage for watercraft or aircraft, except for watercraft that is ashore at the premises where the insured conducts their "garage operations."

There are no current ISO endorsements available to buy back or delete this exclusion.

For insurers and brokers that have access to coverage for a variety of difficult watercraft, boating, aviation or aircraft situations, refer to the sections for either Marine or Aircraft, in The Insurance Marketplace, published by The Rough Notes Company, Inc.

12. Defective Products: "Property damage" to any of the insured’s products because of damage caused by a defect in the product or any part of it, is not covered.

Example: The insured replaces an engine in a vehicle and the engine has a defective part that causes the vehicle to catch fire. There is no coverage under this policy for the engine damage.

Optional coverage does exist for this exclusion via endorsement CA 25 01, Broad Form Products Coverage. This form eliminates the exclusion, providing protection against loss involving an insured's defective products.

For a complete list of endorsements that apply to the Garage Policy, please refer to PF&M Section 222.4-3, Garage Available Endorsements and Their Uses.

13. Work You Performed: "Property damage" to the insured’s work or any part of it is excluded if the "property damage" results from any part of the work itself or from the parts, materials or equipment used in connection with the work. There are no current ISO endorsements available to buy back or delete this exclusion.

14. Loss Of Use: Loss of use of other property that is not physically damaged is excluded if it is caused by any defect, inadequacy or dangerous condition in the insured’s product or work; or when it has been caused by any delay or failure of the insured or anyone acting on the insured’s behalf in the performance of the terms of a contract or agreement.

Note: An exception exists for this exclusion. The Garage policy will respond to a loss of use situation if the loss of use of other property is the result of sudden or accidental injury to either the insured’s product or work, after it is being used as intended.

There are no current ISO endorsements available to buy back or delete this exclusion.

For insurers and brokers that have access to coverage for a variety of difficult, unusual or specialty product situations, refer to the section for Products Liability in The Insurance Marketplace, published by the Rough Notes Company, Inc. For an interesting situation that illustrates the nuances involving this situation, please refer to PF&M Section 275_C005, "Loss Of Use Of View Held Not Covered By Umbrella Liability Policy" in Court Cases.

15. Products Recall: Damages for any loss, cost or expense, whether incurred by the insured or by others, because of loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of the insured’s product, the insured’s "work you performed," or other property that the insured’s work or product is a part of, is excluded when withdrawn, recalled or removed because of a known or suspected defect, deficiency, inadequacy or dangerous condition.

It does not matter what party initiates the withdrawal, recall or removal, there is no coverage. Basically, if the insured knows or has reason to suspect that a product, work or property is defective or could cause injury or danger, there is no coverage for the expense and cost of the recall, repair or removal.

Example: Jamie's Car Doctors had a very successful brake inspection and repair promotion that lasted two weeks. Jamie's performed nearly 200 brake replacements. A month after the promotion, they started getting complaints about brake malfunctions. Customers reported brake failures during sudden stops. They ended up having to contact every customer they serviced during the promotion to replace the brake pads. Jamie's owner first decided to file a claim for the expense of the recall. However, his parts department manager confessed that, prior to the promotion, he failed to check Jamie's inventory of pads. He gave their mechanics pads from their defective parts storage. Jamie's owner threw away his uncompleted claim form….and then fired the parts manager.

There is currently no standard ISO endorsement available to buy back this coverage or delete this exclusion.

16. War: No "bodily injury" or "property damage" resulting from any act, incident or condition of war, whether declared or undeclared, is covered. War is clarified to include in its definition acts such as civil war, insurrection, rebellion or revolution. The term also applies to any activity that is warlike in nature.

17. Distribution Of Material In Violation Of Statutes Exclusion Applicable To "Garage Operations" Other Than Covered "Autos": This exclusion was created in response to consumerist concerns and legislation concerning the harm caused by commercial spam. There is no coverage under the garage policy for either bodily injury or property damage related to incidents that are prohibited by the Telephone Consumer Protection Act, the CAN-SPAM Act or similar ordinances.

Example: Midtowne Metro Car Sales is insured under a garage policy. Midtowne sends notice to its insurer, requesting it to handle a claim that was just filed against it. The claim was a notice of a class-action lawsuit. It is on behalf of thousands of citizens in the Midtowne Metro sales area who are suing because they received e-mail advertisements of Midtowne's monthly auto deals. Midtowne sent the e-mails based on an e-mail list it bought from a third party. Midtowne's insurer turns down the claim request since the auto dealer's action involved spamming.

C. LIMIT OF INSURANCE

The "Garage Operations"—Other Than Covered "Autos" section is subject to two insurance limits. One is an Each Accident Limit, which is the maximum amount available for a given, eligible loss. The other is the Aggregate Limit of Insurance. This limit is the maximum coverage available for all eligible losses that occur within a given policy term. Typically the policy term is annual but, depending upon circumstances, the aggregate may apply either to a period that is greater or less than 12 months.

Example: Taylor's Custom Carriages has a garage policy that is effective from 12/1/05 to 12/1/06. Taylor's Loss Control Chief contacts their insurer and arranges to extend the policy period to 3/1/07 and then to renew the policy with March to March effective dates. It was done in order to match the garage policy effective dates with Taylor's' other policies. Taylor's insurer informs the shop that the same aggregate limit will apply to the 15-month policy.

An endorsement, CA 99 38—Split Liability Limits—Garages is available with reference to the Limits of Insurance. By using this endorsement, the Limit of Insurance for the Liability Coverages is changed from a single limit to a split limit for Bodily Injury Liability Each Person, Bodily Injury Each Accident and Property Damage Each Accident. The formula for the computation of the increase in premium is found in the ISO Business Auto Rating Program.

1. Aggregate Limit Of Insurance—"Garage Operations"—Other Than Covered "Autos"

No matter how many insureds are involved, how many claims are made, "suits" brought, parties bringing "suits" or claims, with respect to "garage operations" other than the maintenance or use of covered "autos," the most the insurer will pay for the total sum of all damages is the Aggregate Limit of Insurance shown in the Declarations for "Garage Operations"—Other Than Covered "Autos."

If the following coverages have been added to the policy by means of endorsement:

• "Personal Injury" Liability Coverage;
• "Personal and Advertising Injury" Liability Coverage;
• Host Liquor Liability Coverage;
• Fire Legal Liability Coverage;
• Incidental Medical Malpractice Liability Coverage;
• Non-Owned Watercraft Coverage; or
• Broad Form Products Coverage;

then the Aggregate Limits of Insurance also applies to any damages involving these coverages with respect to "Garage Operations"—Other Than Covered "Autos."

The coverage form states that those damages payable under the Each Accident Limit of Insurance for "Garage Operations"—Other Than Covered "Autos" must be paid under that portion of the liability section. The wording is to make sure that policy's aggregate limit is properly applied to losses involving "other than covered autos" and to avoid duplicate coverage (from more than one part of the policy responding to the same loss).

The most that will be paid for damages from "bodily injury" and "property damage" that result from any one "accident" is the Each Accident Limit of Insurance that has been indicated in the declarations for "Garage Operations"—Other Than Covered "Autos."

The policy wording states that the term, "accident", also refers to all "bodily injury" and "property damage" that results from a continuous or repeated exposure to substantially the same conditions. In other words, such a loss exposure would be defined and treated as a single accident (subject to the policy's applicable limits).

There is also an explanation on how to apply the Aggregate Limits of Insurance for "Garage Operations"—Other Than Covered "Autos." The limits apply separately to each annual 12 month policy period, starting at the inception of the policy. If there is any remaining period of less than 12 months, the limits apply separately to that period also, unless the policy was extended for that period; in which case, the extended period is part of the preceding policy period for purposes of application of the limits.

Example: The insured starts with a policy that was originally issued with January 1 effective dates. In the second policy period, the insured requests that the policy expiration be extended until July 1 to match the insured's accounting year. The policy limits apply separately to the first annual 12-month policy period of January 1 to January 1. They also apply on an extended basis to the adjusted expiration day of July 1. From that point, the annual 12-month period of July 1 to July 1 will each have their own, separate policy limits.

2. LIMIT OF INSURANCE—"GARAGE OPERATIONS"—COVERED "AUTOS"

The most the insurer will pay, for the total of all damages including any "covered pollution cost or expense" that results from any one covered "accident" as a result of "garage operations" involving the ownership, maintenance or used of covered "autos," is the Each Accident Limit of Insurance for "Garage Operations"—Covered "Autos," as shown in the Declarations. This limit is applied, no matter how many insureds are shown, how many "autos" are covered, how many vehicles are involved in the "accident," the premium paid, or the number of claims made.

Example: The two named insureds on a Garage Policy are Smith, Inc. and the individual who owns the corporation, John Smith. The corporation owns several private passenger vehicles that John uses for both business and pleasure. One evening, while using a vehicle on a personal errand, John causes a serious accident. The injured party sues both John as an individual and Smith, Inc. as the vehicle owner, for $500,000 each, because of the severity of the injury. The Garage Policy has a limit of liability of $500,000, Each Accident for “Garage Operations” – Covered “Autos”. The claimant is awarded $1,000,000 or $500,000 from each party named in the lawsuit. However, the insurance under the Garage Policy pays a total of $500,000.

No matter how many named insureds are shown, the Each Accident Limit of Liability for "Garage Operations"—Covered "Autos" is the maximum that may be paid for any one covered accident.

The "Garage Operations"—Covered "Autos" Limit of Insurance has the same clarification as explained above. If the "accident" is a result of "Garage Operations"—Covered "Autos," it should be paid under the Each Accident Limit of Insurance for "Garage Operations"—Covered "Autos" and not under the Each Accident Limit of Insurance for "Garage Operations"—Other Than Covered "Autos."

The definition of "accident" also includes all "bodily injury," "property damage," or "covered pollution cost or expense" that occurs as a result of continuous or repeated exposure to substantially the same conditions.

The final paragraph of the section applying to Limit of Insurance reveals that no party is entitled to receive duplicate payments for the same elements of "loss" under the Garage Coverage Form, any coverage part, or any endorsement attached to this Coverage Part.

D. DEDUCTIBLE

A $100 deductible applies in limited circumstances. The deductible is triggered by accidental property damage suffered by an "auto" caused by work performed by the insured, on that "auto."

SECTION III—GARAGEKEEPERS COVERAGE

A. COVERAGE

The insurer agrees to pay the amounts that the insured becomes liable for, as a result of damages to a customer’s auto or to a customer’s auto equipment, while the customer’s auto or auto equipment has been left in the care of the insured. This endorsement further specifies the valid circumstances of care that are covered. These are: attending, servicing, repairing, parking or storing at the insured’s garage operations.

Three Physical Damage Coverage options are:

• Comprehensive Coverage—damage from any cause except the customer’s auto’s collision with another object or the customer’s auto’s overturn.
• Specified Cause of Loss Coverage—damage from fire, lightning, explosion, theft, mischief or vandalism.
• Collision Coverage—damage caused by the customer’s auto’s collision with another object or the customer’s auto’s overturn.

The insurer has the right (as well as a contractual obligation) to defend the insured for any suit for losses that may be covered by this insurance. The insurer has no right or obligation to defend against any suit for damages not covered by this insurance. The insurer may at any time and at the insurer’s discretion investigate or settle any claim or suit. The option to settle the claim or loss out-of-court is the insurer’s. The insurer is no longer obligated to provide defense, and the insurer’s right and duty to defend ends, when the Limit of Insurance is spent in payments of either judgments or settlements. Once the policy limits have been paid in settlement of claims, awards or judgments, the insurer no longer is obligated to provide any additional defense, even if additional claims, losses or suits are filed against the insured.

WHO IS AN INSURED

The named insured (entity appearing on the policy declarations) is an insured along with partners of partnerships, members of limited liability companies, employees, along with directors or shareholders of the named insured, while they are acting within the scope of their duties to the named insured.

COVERAGE EXTENSIONS

This policy section provides five, supplementary payments. Since they are supplementary, the coverage is in addition to the Limits of Insurance stated in the declarations. They are as follows:

a. All expenses the insurer incurs. This item clarifies that the limit of insurance is not reduced by the insurer’s expenses.

b. Cost of bonds needed to release attachments in a suit is provided for, if the amount of the bond is within the applicable policy limit.

c. If the insurer requests the insured to participate in any investigation or defense, reasonable expenses are provided for the insured. This includes any actual loss of earnings, up to $250 a day, if the insured must take time off work.

d. All costs taxed against the insured in the suit; in cases where the court assesses the costs and expense of the trial against the negligent party, this supplementary payment can provide some extensive benefits, over and above the policy limits.

e. Interest on the amount of the judgment that has accrued after the judgment has been entered, but before the insurer has paid the judgment or the policy limits, is covered in full.

EXCLUSIONS

Some significant exclusions apply to the coverage provided in this endorsement and should be carefully reviewed. The restrictions address the type of ineligible damages and the type of ineligible property (regardless how they are lost or damaged).

Item 1 - Losses involving the following situations are excluded:

a. Contractual Obligations and any liability that may result from any agreement in which any insured has accepted responsibility for loss.

b. Theft or conversion caused by the insured, employees of the insured, or shareholders of the insured.

c. Defective Parts or materials.

d. Faulty Work performed by the insured.

Item 2 - Losses involving the following property are excluded:

·         Tape decks or other sound reproducing equipment unless permanently installed in a customer’s auto.

·         Tapes, records or other sound reproducing devices designed for use with sound reproducing equipment.

·         Sound receiving equipment designed to use as a citizens' band radio, two-way mobile radio, telephone or scanning monitor receiver, including related antennas and accessories, unless permanently installed in the dash or console opening normally used by the manufacturer for the installation of a radio.

·         Any equipment designed or used to detect or locate radar including jamming apparatus and laser detectors.

Note: The policy does not make reference to increasingly common and sophisticated computing, visual and/or navigational devices.

Item 3 - Losses involving the following perils are excluded:

• War
• Warlike action (by military personnel)
• Insurrection and similar, civil acts

Included in this exclusion is any government activity designed to deal with such acts.

LIMIT OF INSURANCE AND DEDUCTIBLE

Three clarifications exist with regard to the Limits of Insurance and the application of the deductible as they apply to the Garagekeepers Coverage:

1. The most the insurer will pay for each loss at each location is the limits shown in the Garagekeepers Endorsement schedule for that specified location, for the coverages designated, minus the deductible shown for that coverage. The limit shown is the maximum amount available for any one loss regardless of the number of customers’ autos, insureds, claims or suits that may result, or the amount of premium that has been paid.

Example: To illustrate, a fire damages four vehicles in one loss, for a total of $65,000 in damages. If the limit shown is $50,000, then the maximum that will be paid for this loss is $50,000. It is very important that one of the considerations the insured makes in selecting both the coverage and the limit is the total number of vehicles in the insured’s care at any one time and their associated values.

2. The maximum deductible stated in the Garagekeepers Coverage schedule for Comprehensive or Specified Causes of Loss Coverage is the most that will be deducted for all the claims, losses or damages that result from any one event of theft, mischief or vandalism.

When Comprehensive or Specified Causes of Loss Coverage has been selected, two deductibles need to be designated. The first is a deductible for each auto, and the second is the maximum for a theft, mischief or vandalism loss.

Example: If the same four vehicles were damaged in the same vandalism loss, the deductible would be handled as follows: If a $100 deductible was selected for each, subject to a $500 maximum, then $100 times the four vehicles would equal $400 total in deductibles and the maximum would not come in to play. If, however, the maximum was $250 instead of $500, then only a $250 deductible would be the responsibility of the insured based on the maximum or deductible cap for theft, mischief or vandalism loss.

This maximum or cap does not apply to any other causes of loss other than theft, mischief or vandalism. Any other cause of loss, such as fire, will be assessed for each auto's deductible.

3. At times, the insurer will pay all or a part of the deductible in order to settle or handle a claim or suit to everyone’s best advantage. In those cases, the insured is obligated to reimburse the insurer for the deductible or any portion of the deductible that the insurer has paid.

SECTION IV—PHYSICAL DAMAGE COVERAGE

A. COVERAGE

The insurer will pay for "loss" to a covered "auto" and its equipment for the following coverages if they have been selected in the Declarations and a symbol has been inserted showing the covered "autos":

Comprehensive Coverage - any cause with the exception of a covered "auto" that either collides with another object or which overturns./ This coverage responds similarly to the Special Cause of Loss provided in Property or Inland Marine Policies. It covers all types of physical damage losses unless excluded.

Specified Causes of Loss Coverage - protects against loss caused by:

·         fire, lightning or explosion

·         theft

·         windstorm, hail or earthquake

·         flood

·         mischief or vandalism

·         sinking, burning, collision or derailment of any conveyance transporting the covered "auto"

This coverage is limited since only those causes of loss that are specified are covered, unlike the Comprehensive which covers all causes of loss unless excluded.

Collision Coverage: caused by the covered "auto's" coming into violent contact with another object or by overturn of the covered "auto."

When used in this section of the Coverage Form, "another object" is not limited to just another vehicle, but could be an animal, bird, person, tree, building, sign or so forth.

Glass Breakage: Hitting a Bird or Animal—Falling Objects or Missiles: When Comprehensive Coverage is carried by the insured, the insurer will pay for glass breakage, "loss" caused by hitting a bird or animal, and "loss" caused by falling objects or missiles, under the Comprehensive Coverage. If a glass "loss" occurs as a result of the covered "auto’s" collision or overturn, the insured has the option of covering the glass "loss" under the Collision Coverage.

Coverage Extension - Loss of Use Expenses: If Hired Auto Physical Damage has been purchased then this policy will pay the expenses an insured must pay under a written rental contract or agreement. The coverage depends on the coverage selected for any covered "auto" on the policy declarations so the extension may apply to incidents involving collision, other than collision and/or specified perils. This is limited to $20 per day and $600 maximum. Higher limits may be purchased with endorsement CA 99 90.

B. EXCLUSIONS

1. Excluded is any coverage for any incident of loss that is caused by, or that results from the following, regardless of any other cause, event that contributes concurrently, or in any sequence to the "loss":

a. Nuclear Hazard: the explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination; no matter how caused.

b. War or Military Action: war, whether declared or undeclared, civil war, warlike action by a military force which includes acts of defense or to hinder any such insurrection, rebellion, revolution, usurped power or any action to hinder or defend against such.

The policy wording is meant to make it clear that losses involving concurrent causation and proximate cause do not affect the application of the Nuclear Hazards and War or Military Action Exclusions. These type "losses" are excluded no matter how caused or whether or not in combination with any other cause of "loss."

2. No coverage is available for a covered "auto" that has been leased or rented to others. However, coverage is provided in cases where an auto is rented to a customer while that customer’s "auto" has been left with the insured for servicing or repair.

No coverage exists under the Garage Policy for any covered "auto" while it is used in, practicing for or being prepared for any professional or organized racing, demolition contest or stunting activity.

For insurers and brokers that have access to coverage for a variety of difficult business "auto" or trucking situations such as racing activities, refer to the section for Automobiles, Trucks or Recreational Vehicles in The Insurance Marketplace, published by The Rough Notes Company, Inc.

The following types of property are not covered:

·         tapes, records, discs or other similar audiovisual equipment or data electronic devices designed for use with such type equipment;

·         equipment designed or used to detect, locate, jam or disrupt any type of speed measurement devices including but not limited to radar or laser devices;

·         any electronic equipment, whether or not permanently installed, that receives or transmits audiovisual or data signals and that is not designed solely for sound reproduction;

• any accessories used with the electronic equipment described in the paragraph above.

An option to the above is CA 99 60—Audio, Visual and Data Electronic Equipment Coverage. This is a buyback endorsement for Physical Damage Coverage to audiovisual and data electronic equipment that is excluded in the Coverage Form. This buyback applies only to the equipment that is permanently installed or which is removable from a housing unit that is permanently installed. Those "autos" that are covered by this endorsement must be scheduled and a $100 deductible applies. The formula for determining the additional premium is found in the ISO Garage Rating Program.

The above exclusion for audiovisual equipment and accessories do not apply to:

a. equipment and its accessories, designed only for sound reproduction, that is permanently installed in the covered "auto" at the time of "loss" or if that equipment is removable from a permanently installed housing unit, and which the equipment is designed to operate only off the power of the "auto’s" electrical system; and

b. any other electrical equipment that is normal to the operation of the covered "auto," that monitors the operating system, or that is an integral part of the same unit housing any sound reproduction equipment and permanently installed in the opening of the dash or console normally used by the manufacturer for installation of a radio.

There is also an option for protecting storage media: form CA 99 30—Tapes, Records and Discs Coverage. This endorsement extends Physical Damage Coverage for tapes, records and discs in covered "autos" for up to $200. The formula for determining the additional premium is found in the ISO Garage Rating Program.

For a complete list of endorsements that apply to the garage policy, refer to PF&M section 220.4-3.

3. False Pretense: No coverage is available for any "loss" that involves an insured who voluntarily parts with an eligible "auto" due to a trick, scheme, under false pretenses; or involving illegal acquisition.

Example: Suburban Motors turns in a loss on a pre-owned vehicle it purchased from an individual two weeks earlier. When investigating the loss, the adjuster discovers that the seller did not have legal title to that "auto" because it was actually stolen. The seller used fake papers during the sale. The insurer denies the claim.

Refer to endorsement CA 25 03—False Pretense Coverage. Dealers and garage operations that receive used vehicles for trade-in may purchase False Pretense Coverage by using this endorsement. The insured would be protected up to the specified limit for vehicles acquired from customers by the false pretense of the customer. The formula for the computation of the increase in premium is found in the ISO Business Auto Rating Program.

4. There is no coverage for:

a. the expected profit of the insured, and there is no coverage for the loss of market value or resale value.

b. any "loss" to a covered "auto" that is displayed or stored at a location that is not listed as a covered location for Physical Damage in the Declarations, when that loss occurs more that 45 days after the insured’s use of that location begins. This allows 45 days of temporary coverage for a newly acquired location, but once that location has been in the insured’s use more than 45 days, no coverage exists unless added or endorsed to the policy;

c. Collision Coverage for a vehicle when it is driven or transported more than 50 road miles away from either the point of purchase or distribution; and

d. loss to a covered auto that is caused by or resulting from the collision or upset of a vehicle transporting it. This exclusion only applies to Specified Causes of Loss Coverage.

Refer to endorsement CA 25 02—Dealers Driveaway Collision Coverage. Dealers and garage operations that have a driveaway exposure may need additional Collision Coverage that may be provided through this endorsement, which eliminates the 50 mile cap; however, if this endorsement is used, the insured must provide additional information with the periodically required reports. Any increase in premium for the use of this endorsement is at the discretion of the insurer.

5. Diminution of a covered vehicle's value is not an eligible loss. This term is defined in the policy's definition section. Diminution of value often occurs when a new auto suffers some type of physical damage such as paint damage from a hailstorm. The vehicle is repaired but its market value has diminished since it can no longer be sold as a new vehicle.

Example: The insured has a collision loss and the vehicle is repaired. The repair shop explains to the insured that their car is now worth less than before the loss just because people will not pay as much for a car that has been in an accident. The insured presents that perceived loss of value to the company and is denied.

6. Other Exclusions: Excluded is coverage for "loss" caused by or that results from the following: wear and tear, freezing, mechanical or electrical breakdown; or from blowouts, punctures or other road damage to tires; however, if any of the previous are caused by a "loss" that is covered by this coverage form, then the exclusion does not apply.

There are no current ISO endorsements available to buy back or delete this exclusion. The insured should consider checking into the special warranty, labor and replacement programs that are available through many dealerships for this protection.

C. LIMIT OF INSURANCE

This section attempts to explain the application of the policy's coverage when settling an eligible loss.

1. The maximum amount that the insurer will pay for "loss" in any one "accident" is the lesser of the following:

a. the actual cash value of the damaged or stolen property, at the time of the "loss"

b. the cost to repair or replace the damaged or stolen property with other property of like kind and quality.

2. Adjustments must be made for physical condition and depreciation to determine the actual cash value

3. If fixing the auto increases the value, the company does not pay for that betterment.

One endorsement, CA 99 28, Stated Amount Insurance, is available to amend the limit of liability for physical damage coverages. For those vehicles that are scheduled in the endorsement, settlement of physical damage losses is based on actual cash value, the cost to repair or replace, or the schedule's specified limit (whichever option is the least expensive for the insurer). The formula for determining the additional premium is found in the ISO Garage Rating Program.

4. The policy also offers the following, additional provisions:

a. the most that will be paid at any one location, regardless of the number of "autos" involved, is the amount that is shown in the Declarations for that location. If the loss is a transit loss, no matter how many vehicles have been damaged or suffer loss, the most that will be paid is the amount shown in the Declarations for loss in transit;

b. when the policy is on a Reporting Basis, whether monthly or quarterly, if the actual value on the date of a report exceeds the reported value as of that date, the insured is only obligated to pay a percent of the loss. That percent is determined by dividing the total reported value for the involved location, by the value the insured actually had on the date of the last report. For delinquent reports, the most the insurer will pay is 75% of the Limit of Insurance shown in the Declarations for that location; and

c. for non-reporting policies, if the actual value is greater than the stated value, the insurer is not obligated to pay the entire limit. Only a percent will be paid based on stated limit, divided by the actual limit the insured had on the date of the "loss."

D. DEDUCTIBLE

The insurer will pay for repair, return or replacement of damaged or stolen property for each covered "auto," minus the deductible shown in the Declarations. The Comprehensive or Specified Causes of Loss Coverage deductible applies only to those losses that are caused by theft, mischief or vandalism; and, no matter how many autos are involved, the per loss deductible shown in the Declarations for Comprehensive or Specified Causes of Loss is the maximum that will apply to any one event caused by theft, mischief or vandalism.

SECTION V—GARAGE CONDITIONS

Two groups of Conditions are found in this section of the Coverage Form. One is Loss Conditions and the other is General Conditions. Both sets of Conditions apply in addition to the Common Policy Conditions that should be attached to the Garage Coverage Form in the development of a Garage Policy.

A. LOSS CONDITIONS

1. Appraisal For Physical Damage Loss: If the insurer and the insured do not agree to the amount of the "loss," either party may demand an appraisal. When this occurs, each party selects a competent appraiser, both of whom will select together a competent and impartial umpire. Each appraiser will separately state the actual cash value and amount of "loss." If the two appraisers do not agree, they will submit their differences to the umpire. When any two of the three agree, that decision is binding on all parties. The insurer and the insured will each pay the cost of the appraiser that they selected but will bear the expense of the umpire and costs of the appraisal equally.

Even though the insurer has submitted to an appraisal, the insurer retains the right to deny the claim.

Note: Although the insurer includes a statement that it has the right to turn down a claim, a denial after submitting to binding arbitration, especially if the decision went against it, might be problematic. For an illustration of the binding nature of the arbitration process, please refer to PF&M Section 131_C083, "Insurer Must Accept Decision Of Its Approved Umpire" in Court Cases.

2. Duties In the Event Of Accident, Claim, Suit or Loss: The insurer has no duty to provide any coverage under this coverage form unless the insured has complied fully with the following duties:

a. When any of these events occur, the insured must give either the insurer or an authorized representative of the insurer prompt notice of such, including:

1) how, when and where the "accident" or "loss" occurred

2) the insured’s name and address

3) if known, the names and addressees of any injured persons or of any witnesses

b. any involved insured must:

1) under no circumstances, make any obligation, payment or incur any expense without the insurer’s consent. To do so is at the insured’s expense.

2) immediately send the insurer copies of any request, demand order, notice, summons or legal paper received regarding the claim or "suit"

3). cooperate with the insurer in the investigation, settlement of the claim or defense of the "suit”.

4) provide the insurer with authorization to obtain all medical records or other pertinent information

5) as often as the insurer reasonably requires, the insured must submit to examination by a physician of the insurer’s choice and at the insurer’s expense

c. or physical damage losses to a covered "auto" or its equipment, the insured must also do the following items:

1) notify the police promptly of any theft of a covered "auto" or its equipment

2) take all reasonable steps to protect the covered "auto" from further damage and keep a record of any expenses to be considered in the settlement of the claim

3) before the insurer repairs or provides disposition of the claim, the insured must allow the insurer to inspect the covered "auto" or any necessary records to prove "loss"

4) agree to examination under oath if requested by the insurer and provide the insurer with a signed statement of those answers

3. Legal Action Against Us: No one may bring legal action against the insurer under this coverage form until:

a. there has been full compliance with all terms of this coverage form

b. with respect to any liability coverage provided in this insurance, the insurer agrees in writing that the insured has an obligation to pay, or the amount of that obligation has been determined by judgment after trail. No one has the right under this policy to bring the insurer into any action to determine the insured’s liability.

4. Loss Payment—Physical Damage Coverages: The insurer has the option to determine which of the following methods will be used for payment of "loss":

a. to pay for, repair or replace the damaged or stolen property

b. return the stolen property, at the insurer's expense; the insurer will also pay for any damages that result to the "auto" from the theft

c. take all or any part of the damaged or stolen property at an agreed or appraised value.

Any payment made will include sales tax, where applicable.

5. Transfer Of Rights Of Recovery Against Others To Us: If the insurer has made payments to a party under this coverage form, any rights that party may have to recover from another are transferred to the insurer, and that party receiving payment must do everything necessary to secure the rights of the insurer to recover, doing nothing to impair those rights.

For more information, including access to relevant court cases, please refer to PF&M Section 130.6-13, Transfer Of The Rights Of Recovery (Subrogation).

B. GENERAL CONDITIONS

1. Bankruptcy: Even if the insured or the estate of the insured becomes bankrupt or insolvent, the insurer is still obligated under this coverage part and not relieved of any responsibilities.

2. Concealment, Misrepresentation or Fraud: This coverage form is void in any case of fraud by the insured at any time as it relates to this coverage form. It is also void if the insured or any other insured at any time intentionally conceals or misrepresents material facts concerning:

a. this coverage form

b. the covered "auto"

c. the insured’s interest in the covered "auto"

d. a claim under this coverage form

Example: Nigh-Eve Mutual issues a garage policy to Acme Autos. Acme turns in a claim involving losses to more than a dozen new cars that it claims were vandalized on its lot. An investigation reveals that, while Acme's auto application indicated they dealt in higher value, new cars, the dealership is actually a used car dealership, featuring very old vehicles and targeting persons who have risky credit. The loss is denied.

3. Liberalization: If the insurer revises this coverage form by providing broader or more coverage without an additional premium charge, the insured’s policy will automatically provide the additional coverage as of the day the revision is effective in the insured’s state.

4. No Benefit To Bailee—Physical Damage Coverages: The insurer does not recognize any assignment or grant any coverage for the benefit of any party while holding, storing or transporting property for a fee, regardless of any other provision of this coverage form.

5. Other Insurance:

a. For covered "autos" owned by the insured, this insurance is primary. For covered "autos" not owned by the insured, this insurance is excess over any other collectible insurance. When a "trailer" that is considered a covered "auto" is connected to another vehicle, the liability coverage provided for the "trailer" is excess when connected to a vehicle not owned by an insured.

b. If hired auto physical damage coverage applies, then any covered "auto" the insured leases, hires, rents or borrows is considered an owned, covered "auto," unless that "auto" is leased, hired, rented or borrowed with a driver.

An endorsement is available to add coverage should an employee hire an auto in their own name as an individual to perform business-related duties and activities for his/her employer. The endorsement is CA 20 54—Employee Hired Autos.

c. Regardless of the provisions of paragraph a, liability coverage in this coverage form is primary for any liability that has been assumed in an "insured contract."

d. When any other insurance covers the "loss" on the same basis, regardless of whether primary or excess, the insurer will only pay their share. The insurer’s share is the proportion that the limit of insurance of this coverage form bears to the total of the limits of all coverage forms and policies that apply on the same basis.

Ratios will be determined based on each insurer’s percent of limits to the total limits applicable. The "loss" will be proportioned among the insurers accordingly.

Example: Policy A has a limit of $50,000. Policy B has a limit of $100,000 and Policy C has a limit of $1,000,000. The total of all limits available to pay claims is $1,150,000. Company A has 50,000/1,150,000 of the obligation or roughly 4%. Company B has 100,000/1,150,000 of the obligation or about 9%. The remaining 87% is attributed to Company C with 1,000,000/ 1,150,000. The total amount that the insured is judged liable for is $500,000. Company A pays $20,000, Company B pays $45,000, and Company C pays the remaining $435,000.

6. Premium Audit:

a. The deposit or estimated premium charged for this coverage form has been based on the exposures the insured conveyed to the insurer at policy inception. The insurer will compute the final premium based on the actual exposures of the insured. The estimated premium will be credited against the actual final premium and the first named insured will be billed for any balance. If the estimated premium exceeds the actual final premium, the first named insured will receive any refund.

b. If the policy is issued for more than one year, the premium charged will be computed annually based on the rates of the insurer that are in effect at the beginning of each year of the policy.

7. Policy Period, Coverage Territory: The insurer will cover "accidents" and "losses" under this coverage form involving a covered "auto" that occur:

·         during the policy period shown in the declarations

• within the coverage territory

The coverage territory, including while being transported between any of these places, is:

a. the United States of America

b. the territories and possessions of the USA

c. Puerto Rico

d. Canada

Example: An insured covered by a garage policy has a vehicle stolen from a salesperson at a hotel in Arizona. The insured carried comprehensive coverage, so the theft of the vehicle was covered since it occurred in Arizona during the policy period. However, the thief drove the vehicle into Mexico where the thief was involved in a major accident. One of the parties injured in the accident in Mexico tried to make a claim against the vehicle owner under the owner’s business auto policy. The claimant alleged that the owner was negligent in not properly preventing theft from occurring. The vehicle had no anti-theft devices or alarms. Whether or not the insured was found to be negligent and liable, the garage policy would not respond to the liability claim because the accident occurred in Mexico (outside the covered territory). The insurer denied the liability claim on that basis but made payment for the theft of the vehicle.

e. Worldwide coverage is provided if:

1) The covered auto is leased, rented or hired for a period of less than 30 days

2) The responsibility to pay is determined in the territories listed in a., b., c. or d. above

Example: An insured travels to England for a three week vacation. He doesn’t want to be limited by a tour bus so he rents a car for the trip. As he is going through the lake country he comes upon a flock of sheep crossing the road. He is mesmerized and forgets where the brake pedal is and runs into the flock and the shepherd. He provides all of his information and is allowed to return to the States. The shepherd decides to sue and the papers are received at the insured’s office. The insurance company will take on the defense and payment PROVIDED the suit is tried and damages determined in the United States, Puerto Rico, or Canada.

For the Garage Coverage Form, the coverage territory is extended to anywhere in the world if the "bodily injury" or "property damage" is caused by one of the insured’s "products" sold for use in one of the described coverage territories. The original "suit" for damages that result from the "bodily injury" or "property damage" must be first brought in a described coverage territory.

One endorsement is available to minimally expand the coverage territory. The endorsement is CA 01 21—Limited Mexico Coverage. However, because of the very limited nature of this endorsement, it should be read and evaluated carefully before use.

8. Two or More Coverage Forms or Policies Issued by Us: Except for those policies issued specifically as excess policies, if this coverage form and any other coverage form or policy issued to the insured by the insurer and any company affiliated with the insurer apply to the same "accident," the maximum amount that will be paid for the total limit of insurance under all the coverage forms or policies shall not exceed the highest applicable Limit of Insurance under any one coverage form or policy.

Example: The insured has three policies with the insurer, all carrying symbol 1—Any Auto for Liability Coverage. Policy one has a liability limit of $1,000,000, policy two has a liability limit of $500,000 and policy three has a liability limit of $750,000. The total amount available to pay losses from any one accident is the highest of any one of the three policies or $1,000,000 and not the accumulated limit of $2,250,000.

SECTION VI—DEFINITIONS

The words shown in quotation marks throughout this analysis of the Garage Coverage Form are defined in Section VI.

"Accident:" includes continuous or repeated exposure to the same conditions that result in "bodily injury" or "property damage."

"Auto:" a land motor vehicle, trailer or semitrailer.

"Bodily Injury:" bodily injury, sickness or disease sustained by a person, including death resulting from any of these.

"Covered Pollution Cost Or Expense:" any cost or expense resulting from:

·         Any request, demand or order; or

·         Any claim or "suit" by or on behalf of a governmental authority demanding that the "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify, neutralize or in any way respond to or assess the effects of "pollutants."

"Covered pollution cost or expense" does not include any cost or expense arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants”:

a. That are, or that are contained in any property that is:

1. Being transported or towed by, handled or handled for movement into, onto or from the covered "auto":

2. Otherwise in the course of transit by or on behalf of the "insured"; or

3. Being stored, disposed of, treated or processed in or upon the covered "auto," and does not apply to fuels, lubricants, fluids, exhaust gases or other similar "pollutants" that are needed for or result from the normal electrical, hydraulic or mechanical functioning of the covered "auto" or its parts, if the "pollutants" escape, seep, migrate or are discharged, dispersed or released directly from an "auto" part designed by its manufacturer to hold, store, receive or dispose of such "pollutants"; or

b. Before the "pollutants" or any property in which the "pollutants" are contained are moved from the place where they are accepted by the "insured" for movement into or onto the covered "auto"; or

c. After the "pollutants" or any property in which the "pollutants" are contained are moved from the covered "auto" to the place where they are finally delivered, disposed of or abandoned by the "insured."

Paragraphs b. and c. above do not apply to "accidents" that occur away from premises owned by or rented to an "insured" with respect to "pollutants" not in or upon a covered "auto" if:

1. The "pollutants" or any property in which the "pollutants" are contained are upset, overturned or damaged as a result of the maintenance or use of a covered "auto"; and

2. The discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused directly by such upset, overturn or damage.

"Customer's auto" is a land motor vehicle, trailer or semitrailer that a customer leaves with the named insured for safekeeping, service, repair or storage. An employee may also be a customer and so is his family if they pay to have service performed.

"Diminution in value" is the loss of market value solely due an accident. This loss of value can be actual or perceived.

"Employee:" a leased worker is considered as an employee but a temporary worker is not.

"Garage Operations" the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations. "Garage operations" includes the ownership, maintenance or use of the "autos" indicated in SECTION I of this Coverage Form as covered "autos." "Garage operations" also include all operations necessary or incidental to a garage business.

"Insured" any person or organization qualifying as an insured in the Who Is an Insured provision of the applicable coverage. Except with respect to the Limit of Insurance, the coverage afforded applies separately to each "insured" who is seeking coverage or against whom a claim or "suit" is brought.

"Insured contract" refers to any of the following:

1. a lease of premises

2. a sidetrack agreement

3. any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad

4. an obligation required by ordinance with the purpose of indemnifying a municipality, unless it is in connection with work being performed for a municipality

5. That part of any other contract or agreement relating to the named insured's garage business (including an indemnification of a municipality in connection with work performed for a municipality) where the insured assumes the tort liability of another party to pay for "bodily injury" or "property damage" to a third party or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

6. elevator maintenance contract

7. That part of any contract or agreement entered into as part of the named insured's garage business that pertains to the rental or lease by the named insured or "employees", of any "auto." However, such contract or agreement shall not be considered an "insured contract" to the extent that it obligates the named insured or "employees" to pay for "property damage" to any "auto" rented or leased.

An "insured contract" does not include that part of any contract or agreement:

·         that pays an architect, engineer or surveyor for damages due to making maps, drawings, opinions, designs and other similar activities or from giving or failing to give directions or instructions.

·         that indemnifies any one for fire damage to the premises rented or loaned to the named insured.

·         that pertains to the loan, lease or rental of an "auto" to the insured or any of the insured’s "employees," if the "auto" is loaned, leased or rented with a driver

·         that holds a party engaged in the business of transporting property by "auto" for hire, harmless for the insured’s use of a covered "auto" over a route or territory that party is authorized to serve by public authority.

·         that indemnifies a railroad for losses that result from construction or demolition within 50 feet of any railroad property, or that affects any railroad bridge, trestle, track, road-bed, tunnel, underpass, or crossing.

"Leased Worker:" a person leased to the insured employer by a labor leasing firm in which there is an agreement between the insured and that labor leasing firm for that employee to perform specified duties relevant to the conduct of the insured’s business operations. Not included as a leased worker is a “temporary worker."

"Loss" direct and accidental loss or damage. But for Garagekeepers Coverage only, "loss" also includes any resulting loss of use.

"Pollutants" any solid, liquid, gaseous or thermal irritant, or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

"Products" the goods or products made by the insured or sold in a garage business of the insured.

"Property Damage" damage to or loss of use of tangible property.

"Suit" a civil proceeding in which:

1. Damages because of "bodily injury" or "property damage," or

2. A "Covered Pollution Cost or Expense," to which this insurance applies,

is claimed.

"Suit" includes:

a. An arbitration proceeding in which such damages or "covered pollution costs or expenses" are claimed and to which the "insured" submits with the insurer’s consent; or

b. Any other alternative dispute resolution proceeding in which such damages or "covered pollution costs or expenses" are claimed and to which the insured submits with the insurer’s consent.

"Temporary Worker" a person furnished or used by the insured to substitute for a permanent employee or to meet short-term situations.

"Trailer" includes semitrailer.

"Work You Performed " includes

a. Work another party has performed on the insured’s behalf; and

b. The providing of or failure to provide warnings or instructions.