The insured has an exterior prefabricated frame tool shed which unfortunately was damaged by an uninsured automobile. The shed is located on the insured premises within 100 feet of the building. The BOP carrier has denied coverage for the shed maintaining that this property should have been listed as a separate building with a separate limit provided.

The company advised us that the basis for denying coverage is a general rule in the company underwriting manual which states, "Building and personal business property must not be written on a blanket basis. Coverage is provided separately to each building or personal property at each location."

It is our contention that coverage is afforded the tool shed simply through the definition provided for "Buildings, meaning the buildings and structures at the premises described in the declarations." We also contend that coverage could be found under business personal property and/or the tenant homeowners personal property coverage, since the shed was used to service the insured building.

We would appreciate your thoughts and comments.

Pennsylvania Subscriber

Your insurance company's underwriting manual follows the Insurance Services Office (ISO) Businessowners Manual, Rule 17, word for word. "Coverage is to be provided separately to each building or personal property at each location." It is clear that blanket coverage is not currently available under a BOP policy.

In describing covered property, the policy does make a distinction between "buildings" and "structures." Both are to be covered under the category of buildings. However, the term "building" encompasses both building and structure. So the shed cannot be a structure without being a building.

Yet the category "building" includes personal property owned by the insured that is used to maintain and service the buildings on the premises. If the shed is not permanently attached to the ground by a foundation or footers, can it be considered business personal property? If so, then it is covered under the BOP. By the same token, if the shed is not permanently affixed to the ground, it is considered personal property under the tenant homeowners policy, and the loss is covered under the "vehicles" peril.