Coverage Question: How are items covered by insurance damaged while being loaded.

This is an interesting situation that arose a couple of times with some of our restoration contractor clients. The company will be unloading customers’ goods, damaging the property or other nearby items (i.e., a wall or other vehicle). Unfortunately, as simple as the situation and claim sounds, the insurance coverage can be convoluted.

Here are the various ways this type of scenario is typically covered:

Situation 1: Customer’s property is damaged while being unloaded. Coverage for this scenario is not found on a general liability policy or business auto policy. The coverage for this scenario is seen through a specialty policy called bailee’s coverage. This type of policy provides coverage for property in your “care, custody, or control.” This type of coverage is common for businesses that have customers’ property in their control regularly, like moving, delivery or repair companies.

Situation 2: Adjacent property like a wall or vehicle is damaged while unloading customer’s property. Though general liability typically covers property damage, the business auto policy will pick up the claim (in most cases). As long as the property is unloaded by hand or a hand dolly, this is considered “normal use” of the vehicle. The claim will be covered by the business auto policy and excluded from the general liability policy. However, suppose the property is being unloaded by something else like a forklift. In that case, the claim will be covered by the public liability policy because this is no longer “normal use” of the vehicle.

As you can see, properly covering a claim as simple as unloading or moving customers’ property can be challenging tensurere appropriately. This is why we recommend that you partner with an agency that specializes in your operations and understands the risks associated with them.