October 10, 2016

Our insured operates a hotel. Two patrons had parked their motorcycles in the parking lot and had gone inside. The saddle bags were stolen off of their motorcycles, which contained their personal property. Insured does not have surveillance or security working in the parking lot. Would I be able to apply exclusion j(4) Damage to Personal Property in Your Care Custody or Control?

Indiana Subscriber

The care, custody, or control exclusion would not be applicable in this situation. The care, custody, or control exclusion excludes coverage for damage done while the property was in the care, custody, or control of the insured. Just because a vehicle is parked in the parking lot of the insured does not mean that it is in the care, custody, or control of the insured, as the vehicle driver still possesses the key and the title and responsibility of the vehicle. The insured may be liable for negligently allowing a robber on the premises of the hotel due to inadequate security (a lack of surveillance or security personnel as mentioned), which resulted in the theft. If a case is brought, the defense of the insured should be provided, and coverage for liability should apply if the insured is found to be negligent.