Q

We insure an electrical company that was hired to do work in a vacant apartment of a large apartment building. The insured's employee used a master key to enter the apartment and left the key in the door while he worked inside. Someone took the key, necessitating that locks on all the apartments in the building be changed. Our insured was charged for the replacement of all the locks.

The insurer has denied the claim, stating that it does not meet the policy's definition of property damage.

Ohio Subscriber

A

The claim should be properly paid under paragraph b. of the definition of property damage, “loss of use of tangible property that is not physically injured.” The locks are tangible property and the theft of the master key rendered them useless for their intended purpose. The inability of the undamaged locks to provide security because of the loss of the master key is a perfect example of a loss of use claim covered under property damage liability insurance.