Meaning of “Entrusted” in Contractors Equipment Coverage

July 20, 2015

Our insured has a company that leases and rents contractors equipment. A customer with a fake ID rented equipment from them and never returned it.

The Contractor's Equipment form included under the policy insures against direct loss or damage; however, there is an exclusion that states the following:

8. Infidelity of insured's employees or persons to whom the insured property is entrusted.

Is the word “entrusted” broad enough to include property rented to others? The insured feels that this exclusion applies only to infidelity of employees or incidental events like lending the equipment to a friend, not to formal events like renting the equipment to a customer.

Puerto Rico Subscriber

Since the policy does not define the term, it is fitting to look to standard dictionary definition. Merriam-Webster Online defines “entrust” as “to give someone the responsibility of doing something or of caring for someone or something.” Applying this meaning, allowing a customer to take rented equipment from the premises is entrusting the customer with the equipment. From the policy language provided, the entrustment does not appear to be limited to employees and informal lending to a friend. So, unless the policy says otherwise in another provision or exclusion, the word is broad enough to encompass the scenario you describe.