GKLL Direct Primary Coverage Compared to CGL Coverage

Our insured owns a parking garage. The insured has coverage under GKLL as Direct Primary and the standard GL policy. The claimant paid to park his vehicle at the insured's garage, however, the insured did not park the auto. While the claimant's auto was parked there, the pipe above his auto leaked and caused damages to the claimant's auto. Claimant is now presenting a claim. Our question is where the proper coverage for this loss would be: GKLL on direct primary basis or under the GL policy? We find that the insured is legally liable for the loss, but need assistance as to the proper coverage to adjust claim.

Indiana Subscriber

The answer depends on whether the insured had care, custody, or control of the vehicle at the time of the damage. If the insured had ccc, the coverage would be under the GKLL; if not, then the general liability policy could respond. Care, custody, or control depends on the facts of the situation: did the insured have the keys to the car? Or, did the claimant just park his own car and keep the keys?

So, you have to find out if the insured had actual care, custody or control of the car before you decide which policy applies.

Also, since the insured has direct primary coverage under the GKLL, that coverage is primary and legal liability is no requirement for the coverage to apply. However, the general liability policy does require liability. But, as long as you find that the insured is legally liable, that makes the two policies applicable to the same claim (if we presume there is no ccc), and this means the other insurance clauses in the two policies have to be considered when paying the claim. And, of course, you have to consider that the GKLL has a deductible and the general liability policy does not.