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The care, custody, or control exclusion in the commercial general liability (CGL) form is often the subject of many coverage disputes and misunderstandings.

To clarify things a bit, the exclusion applies only to personal property. Exclusions applicable to real property — such as buildings and permanently attached fixtures — are separate items in the liability policy. Also, the majority of court cases support the view that care, custody, or control refers to actual possession or direct physical control as distinguished from having the legal right or legal title to the property. Courts typically hold that control exercised by the insured must be exclusive; that is, the insured must have total possessory control not shared with any other entity in order for the exclusion to be applicable.

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