Q

Our insured is in the business of retail fuel oil supply. He sells the fuel oil and also delivers it to the customer's tank. Does the general liability policy apply to the “keep full” agreements?

Rhode Island Subscriber

A

Concerning the keep full agreements whereby your insured has contracted to keep his customers' tanks supplied with oil, if the insured fails to abide by this agreement and either bodily injury or property damage results, he can turn to the commercial general liability (CGL) coverage form for protection. The CGL form responds to claims for failure to act, just as it responds to claims alleging wrongful action. Incidentally, the Insurance Services Office acknowledges, in a roundabout way, coverage under the CGL form for just such claims by offering an endorsement, CG 22 50 11 88. This endorsement specifically excludes coverage for injury or damage arising out the failure of any insured to supply adequate amounts of gas, oil, water, electricity, or steam. Therefore, if the insurer does not want to cover such exposures, it should endorse CG 22 50 onto the CGL form.