CCC Not As Easy As ABC

CCC Not As Easy As ABC

To The Editor:

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

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

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

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

However, that same scenario does create a CCC exposure for which the named insured is legally liable when assessing common law liability to them, and then having the damages paid under their CGL policy.

Matt Zimmerman

Secretary

Research & Development

The Cincinnati Insurance Company

Cincinnati, Ohio

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 18, 2003. Copyright 2003 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.