CCC Not As Easy As ABC

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To The Editor:

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I know this subject has been addressed to the point of adnauseam, but your June 30 “FC&S Answer” column (“To Care AndControl–Or Not,” page 21) seems to miss an important point aboutthe care, custody and control exclusion j.(4) in the CGL withrespect to “the insured” and “you” or “your.”

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If property in the CCC of an employee, regardless of theirinsured status, doesn't serve to create a CCC exposure for thenamed insured via the “master-servant rule,” how would a corporateentity, for example, ever be legally liable for damage to propertyin their employees' CCC, since the corporate entity can onlyexercise control through the actions of it employees?

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In other words, if the scenario Bruce Hillman quoted inHolter v. National Union Fire Insurance Co. doesn't mean“the insured” (that is, the named insured) was exercisingCCC over the property in question through its employee forinsurance contract interpretation purposes, then does it followthat the named insured cannot be legally liable for the damagecaused by its employee? Or is this a case of the courts havingtheir cake and eating it, too?

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It's just too convenient if, for insurance policy interpretationpurposes, the action of an employee, regardless of their insuredstatus, doesn't serve to be the action of “the insured” in question(that is, the named insured).

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However, that same scenario does create a CCC exposure for whichthe named insured is legally liable when assessing common lawliability to them, and then having the damages paid under their CGLpolicy.

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Matt Zimmerman

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Secretary

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Research & Development

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The Cincinnati Insurance Company

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Cincinnati, Ohio


Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, August 18, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


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