Loss of Value Is Not Direct Physical Damage

October 18, 2010

Our insured is an antique dealer with a special businessowners form. He purchased two paintings to be placed into his inventory that he thought were authentic. Upon further review, he found the paintings were fraudulent. Can he recover under his business personal property coverage for the loss of value to his inventory?

North Carolina Subscriber

There is no coverage for the loss of value. There was no direct physical loss or damage to the property as is required by the policy. This is a cost of doing business loss that antique dealers incur.