Most business owners who purchase Garagekeepers Legal Liabilityinsurance are concerned about cars being stolen or vandalized whileparked in their lots or garages. But sometimes there's a much moreserious twist—one involving gunshots and damaged cars. That was thecase when one FC&S subscriber described the followingunusual (and dangerous) situation.

The agent handles a sports arena with an adjacent parking lotthat is fenced and secured with a gate. Some people entered thearena area and started shooting. The parking lot attendant closedthe parking lot gate and, as a result, the car owners couldn't exitthe lot. A number of cars were damaged by flying bullets.

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The agent said that the arena's insurance company haddenied coverage for the damaged parked cars, and the agentquestioned that denial. After all, the business carried CommercialGeneral Liability (CGL) insurance and Garagekeepers Legal Liabilityon a specified-perils basis. The agent felt that the GaragekeepersLegal Liability policy should be triggered because the attendant,in closing the gate, was negligent.

But FC&S disagreed.

The CGL insurance would not cover the damage because thecars—personal property in this case—were in the care, custody andcontrol of the insured business owner. The CGL's damage-to-propertyexclusion [j.(4)] excludes coverage for damage to personal property(the parked cars) in the insured's care, custody or control. Havingaccepted payment for allowing the cars to be parked in the lot andthen actually closing the gate, the business owner (through theattendant) affirmatively took control of the cars. Therefore, thereis no coverage on the CGL policy for the bullet damage.

But what about the Garagekeepers Legal Liability coverage, whichthe business owner bought to cover damage to the cars in hislot?

The issue here is that the Garagekeepers Legal Liability policyin question is written on a specified-perils basis. The specifiedperils that are covered are fire, lightning, explosion, theft, andmischief or vandalism. Damage via gunshots is not one of thespecified perils, and it really can't be considered mischief orvandalism—it is much more serious than that. There would be nocoverage for the gunshot damage under the specified-perilslanguage.

The problem for this agent, and for many who are writing thiscoverage, is that not only must the coverage be carried—it must bewritten in a broad enough fashion to apply to the actual damage.Had the Garagekeepers Legal Liability coverage been written on acomprehensive basis, instead of only for specified perils, thegunshot damage would have been insured.

You get what you pay for and, in this case, the coverage thatwas paid for just wasn't comprehensive enough.