Note: This article primarily addresses business exposures, but a note at the end addresses similar personal lines exposures.
I recently received the following question:
“An employee of the business we insured accidentally damaged large steel rolling doors in the warehouse while operating a forklift truck. Is there coverage under the 2013 ISO CGL policy for this type of claim?”
I’m still amazed at how often this comes up where agents don’t understand the very limited coverage provided by the ISO CGL policy for damage to rented premises. The submitter of this question has sold and serviced commercial insurance for over 40 years. I’ve seen this type of question from agents with professional designations like CPCU and CIC.
Last year, I blogged about this twice:
- “Is CGL FDLL Coverage Worthless?“
- “Coverage for Damage to Leased Premises…CGL FDLL vs. CP 00 40 vs. CP 00 10“
Given that I’ve blogged about this in the past year or so and written and spoken about this for many years, I won’t belabor the point. But, if you haven’t already, please do the following:
- Read both of the articles above, then
- Pose the claim scenario presented at the beginning of this article and ask your commercial lines staff: “Does the CGL policy cover this claim? If so, how. If not, why, and if not, how can this be covered?
Given the number of times I’ve seen this question, I’m convinced there are many thousands of tenants who are not properly insured. Are you the agent of any of them?
Postscript: There is a similar limitation for coverage for damage to rented premises in ISO homeowners policies, as well as those of most non-ISO insurers. The ISO HO policies limit coverage for damage to rented premises (from apartments and dwellings to hotel rooms and facilities rented for a wedding reception) to only that caused by fire, smoke or explosion. ISO has no way to cover this exposure in their HO program, but some non-ISO programs might, as well as some umbrella policies.