One of the coverages included in our unique insurance program for restoration contractor is Lost Key Coverage. Unfortunately, we have found that many restoration contractors don’t know what this coverage is and how it can protect their business.
What is Lost Key Coverage?
The lost key coverage endorsement typically removes two exclusions and a section of the WHO IS AN INSURED provisions within the general liability policy. It provides coverage for liability arising out of property damage due to loss arising out of the loss of a customer’s keys. It also makes employees and volunteers insureds for liability arising out of property damage to property:
Owned, occupied or used by
Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by the named insured or any employees or volunteers.
Applies only to loss arising out of the loss of a customer’s keys by an insured
Covers only to the actual cost of the keys, the adjustment of locks to accept new keys, or the cost of purchasing and installing new locks; and
Does not apply to loss arising out of a variety of dishonest acts committed by any insured.
While restoring a building partially damaged by fire, you are given keys to go in and out of the building. However, one of your employees loses the keys forcing the building owner to re-key the entire building. It’s important to note that this coverage will not provide coverage for any liability for computer equipment that disappears from the unlocked building. The limit provided (usually $5,000) is to be used only on new locks and keys for the building.