The Case Of The Disappeared Sign
It was a dark and stormy night. The rain dripped from my fedora while I was sitting at my lonely desk and looking out over the skyline. (Youd think I could afford a place with a ceiling.) I could see flashes of lightning illuminating the city and all its secrets. I didnt know then that one of those secrets would invade my quietude and make me consider the signs all around. Particularly, Id think about the sign that wasnt there anymore–the disappeared sign.
See, it all started at the restaurant. The restaurant–call it Anthonys Fish Place, to protect the innocent–had to make a change. This restaurant, well, it had a sign attached to the front of the storefront proclaiming it Anthonys Fish Place. Because of a certain scandal that everybody knows about involving a beautiful young woman and a carp, the name had to be changed to Anthonys Steak Place. The sign–that damned sign–had to be changed. Not to mention the menu.
So a sign company was engaged. The sign was in three great parts–a great big Anthonys, a great big Fish, and a great big Place.
On the Big Day, the sign company employees take down–detach it from the building–the great big Fish and leave it laying, just laying there, on the ground. While putting up the new great big Steak, person or persons unknown make off with the great big Fish. Thats when we knew thered be trouble a-plenty.
The cops spend the next several weeks trying to find that great big Fish. And they dont. Even the feds come up empty. So Mr. X and Mr. Y–co-owners of the newly renamed Anthonys Steak Place–turn to their insurer for help. Big help.
And they dont get it. The claim for the stolen sign is denied–denied!–because it was not attached to the building at the time of loss. The instruments involved are the ISO commercial property coverage form with the special causes of loss form attached.
So whats the real picture here?
My initial gut response is that the insurance company is onto something in its denial of coverage for the theft loss of a sign that had been detached from a building for repair or replacement. The logic goes like this:
Signs–other than signs attached to buildings–are specifically included in the list of Property Not Covered in the Insurance Services Office standard commercial property policy.
However, like the swallows returning to Capistrano, Coverage Extension e. Outdoor property, gives back a limited amount of coverage (1,000 clams) for signs "other than attached to buildings," but only for the specified perils of fire, lightning, explosion, riot or civil commotion, or aircraft. Theft is not within the list–and the temper of Mr. X can hardly be called an explosion, albeit explosive.
So the simple answer (the kind were looking for) and the correct answer (the kind we need) seems to be that this is a sign unattached to a building (so it is not covered property under the basic policy), and that the policys coverage extension for outdoor property does not apply, because its loss was not by one of the specified perils.
Now that its all over, Im comfortable with this. However, some of the members of the gang think the argument could be made that once detached and out-of-the-game, the Big Fish became business personal property of the insured, and would be covered if in the open or in a vehicle within 100 feet of the described premises as "all other personal property owned by you and used in your business." Im not sure about the validity of this argument, but it can be argued.
Night falls. So does the FC&S Answer detective. Buttoning up my overcoat and turning my collar to the chill, I wander the waterfront.
Bruce Hillman, JD, is Editorial Director of Risk and Insurance Markets for the Professional Publishing Group of The National Underwriter Company, in Erlanger, Ky. Questions and comment are invited at fcs@nuco.com.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 29, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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