Care, Custody, or Control Exclusion and BAP Coverage

We have a claim under a commercial auto policy involving an insured who parks his commercial vehicle in another man's garage. The owner of the garage rents one of the three bays to the insured. Our insured has his own key to his bay's garage door and comes and goes as he pleases. Unfortunately, one day the insured did not get the door raised high enough and his vehicle collided with the bottom of the garage door.

After an investigation, the adjuster denied coverage based on the care, custody, or control exclusion in the auto policy. The insured claims this is a covered loss since the garage is stationary and not being transported. The exclusion does refer to property damage to property transported by the insured or in the insured's care, custody, or control, but we think the insured is overlooking the word “or” in the exclusion. Do you think the exclusion is not applicable in this instance?

Connecticut Subscriber

It is not relevant that the garage is stationary. The exclusion refers to property either owned or transported by the insured, or to property in the insured's care, custody, or control. If the words were connected by the word “and”, the insured might have a case; however, the exclusion is not worded that way. The exclusion pertains to property damage to property in the insured's care, custody, or control as a separate item apart from the other two parts of the exclusion. The title of the exclusion is care, custody, or control, and in this situation as described, the insured had the care, custody, and control of the property that he damaged. The exclusion applies to the claim.