Property Damage Liability Coverage Dispute

Our insured is in the tree service and stump grinding business. After completing a stump grinding job, the insured was loading the grinder onto his owned trailer that was attached to his business truck The grinder was half-way on the trailer and part-way out in the street when a vehicle came along and struck the grinder. The damage amounted to $2,000 to the vehicle.

The insured has a general liability policy and a business auto policy. If the insured is held liable for the property damage claim, would this be covered by the business auto policy or the general liability policy?

Arkansas Subscriber

Based on the circumstances of the loss, this would be covered by the business auto policy. The insured was in the process of loading the grinder onto his owned vehicle, and the CGL form excludes bodily injury and property damage arising out of the use of an owned auto; use includes loading and unloading. Conversely, the business auto policy does apply to a claim for bodily injury and property damage caused by an accident and resulting from the ownership or use of a covered auto. The claimant may have hit the grinder, but the property damage was caused by an accident and resulted from the use of a covered auto.