Personal Property in Transit Coverage

January 13, 2011

Our commercial property insured recently had a claim where a piece of ultrasound equipment was stolen from an employee's car. The form provides coverage for personal property in transit, but the carrier claims that it should be covered under the mobile equipment extention. There is no definition of “mobile equipment” in the policy, and the carrier is denying the claim since it was not listed on the schedule provided at renewal. The personal property in transit provision appears to provide coverage. The carrier states that it is not the intent of the policy extension to provide coverage for anything other than a shipment. It is our understanding that coverage includes, but is not limited to, transport by a hired carrier. The policy language is as follows:

Transit means conveyance of your personal property within the policy period and territory as specified in this policy from the time it leaves the original point of shipment until it arrives at its intended destination. This period includes:

1. While the property is in the care, custody or control of hired carriers; and

2. Transfers between conveyances.

Transit does not include personal property while in the custody of your salespeople. Should this policy expire or be cancelled after the property leaves the original point of shipment but before it arrives at its intended destination, coverage will continue on this personal property until it arrives at its intended destination.

Texas Subscriber

It depends on why the equipment was in the employee's car. Technically, if he was delivering it to a client or colleague or was carrying it for some other business purpose, it could be considered a shipment and fit the definition of ”transit.” But, if  it was just in the employee's car when it was stolen was not being shipped, we do not think that would fit the definition you provided due to the portion that states “as specified in this policy from the time it leaves the original point of shipment until it arrives at its intended destination.”