It was identified that ACM materials were damaged directly by water.

The carrier contends that the pollutants exclusion cited provides grounds for partial denial to asbestos containing materials, and microbial growth identified to date.

It is our assessment that: But for the water damages to ACM containing materials, remediation would not be required. What is claimed is the appropriate remediation of Category 3 water. But for the water damage the growth of microbes, et al., would not exist in these circumstances, which must be remediated accordingly.

Our Assessment: We find exception to such exclusion in their cited language and believe it is therefore covered as an exception to such exclusion cited.

We do not find that the 'additional coverage' cited plays a role in this scenario, as we seek claim for direct water damage and ensuing loss of the water caused ensuing damages.

Do you see the same based on the cited language provided by the carrier in the attached, assuming that the facts are as stated?

Answer:

You have accurately assessed the coverage, and the remediation should be covered as part of the water damage loss settlement. But for the water damage, such remediation would not be required, so it is part of the water damage claim.

Had the pollution exclusion been preceded by anticoncurrent language, the exclusion would prevail. The anticoncurrent language includes the provision that 'such loss is to be excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss'. Without this language, the water damage is the cause of loss that led to the pollution discovery and thus the water is the cause of loss.

When the Garbage Can Breaks the Door Glass

A garbage collector picked up a garbage can, threw the garbage in the garbage truck, then in the process of putting the garbage can back in its place the garbage can hit a door of a store, breaking the door glass.

The insured's CGL and BAP policies are with different carriers. The CGL carrier argues that this accident is not covered under the CGL because of the Aircraft, Auto or Watercraft exclusion (exclusion letter g), which includes operation and loading or unloading. The BAP carrier believes that the Aircraft, Auto or Watercraft exclusion of the CGL does not apply since the property, in this case the garage can, has not been delivered by the insured which is a requirement of the loading or unloading definition.

Is this accident a CGL or a BAP exposure?

Answer:

You definitely have a tough situation here, but the answer is that this is part of the insured's process of delivering the garbage can to its final resting place from the truck, so it would be covered by the BAP. The CGL excludes the operations while it is being moved from the truck to the place of its final delivery. The garbage can hit the store door before it reached its final delivery point, so it was in the process of its movement from the truck.

This Q&A helps explain the analysis of determining which of the two forms would apply along the process of operations: Loading and Unloading Question under the CGL Form and the BAP.

Fire Loss Caused by Tenant

I am a North Carolina subscriber with a question related to liability coverage for a tenant of a property. The tenant owns a liability policy to include form, CG 00 01 10 01. The tenant accidentally caused a fire that damaged the premises rented to him. He filed a claim with his insurer. The claim is honored, and payment is pending. The insurer states the coverage is secondary to the insurance available per form CG 00 01 10 01, page 11 of 16, 4.b.ii and 4.b.iii. The insurer's position is that the building owner's insurance is primary. The problem is the building owner does not want to make a claim under its policy. Is the building owner obliged to make a claim or is the liability insurer obliged to issue payment regardless? What is your opinion?

Answer:

The other insurance provision applies to liability that the insured has that he would be legally required to pay damages to a third party. From the description of the loss, the building owner insured does not have a legal liability to pay damages for a fire loss caused by his tenant. If however, the fire loss was caused by other than the tenant's accident, say perhaps faulty wiring or a gas explosion, then the building owner insured could be pulled into a liability situation for which the other insurance provision would apply.

If the loss is as described and is fully caused by the tenant, then the building owner would not be liable to pay any of the damages.

Commercial Property Structures and Fixtures

I have read your Laws of Attachment article and have always agreed with the opinion. I would like your opinion on what constitutes a "deck." In my opinion, I would think that a concrete drive would also serve the same purpose as well as a fence post footing that is poured against the dwelling, garage or outbuilding. I have always pursued the position that "Appurtenance Structures" may not be detached but attached on the basis stated above.

This would make a huge difference in policy as many Appurtenance Structures have a policy limit of 10%, $10,000 or $100,000. If they are no longer detached and are attached, that becomes a very big change in coverage!

Answer:

If the coverage form is ISO commercial property, there is no coverage for "appurtenant structures", but the coverage form covers structures, and it also covers certain property as outdoor fixtures, and others as outdoor property. Structures must be scheduled, while fixtures do not. Fixtures are permanently installed and affixed to the realty. Outdoor property includes items such as fences, antennas, trees, shrubs and plants.

However, fixtures are not structures and vice versa.

A structure is defined as:

a. something (such as a building) that is constructed; b: something arranged in a definite pattern of organization.

A fixture is defined in part by Merriam Webster as:

2. something that is fixed or attached (as to a building) as a permanent appendage or as a structural part a plumbing fixture a device for supporting work during machining an item of movable property so incorporated into real property that it may be regarded as legally a part of it. However, the commercial property form excludes bridges, roadways, walks, patios or other paved surfaces.

Also not covered are foundations of buildings, structures, machinery or boilers if their foundations are below: (1) The lowest basement floor; or (2) The surface of the ground, if there is no basement;

You would need to look at each item being considered for coverage and determine if it is property not covered.

In your initial question you posed the following:

I would like your opinion on what constitutes a "deck." In my opinion, I would think that a concrete drive would also serve the same purpose as well as a fence post footing that is poured against the dwelling, garage or out-building.

If the deck is a paved surface (concrete), then it would not be covered property. Nor would a driveway or any other poured concrete surface.

If you have other questionable property that you are not able to determine based on this information, we will be happy to look at each property item separately and give you a coverage opinion.

Motor Truck Cargo – Equipment Breakage In Transit

Our insured was hired to move their client from Hato Tejas in Bayamón to new facilities on Calle Cesar Gonzalez in Hato Rey, which move included transport of a calibration machine valued at $80K. During transit, the insured's truck braked abruptly to avoid hitting a vehicle that invaded its lane and/or cause an accident with other vehicles. The truck did not impact any vehicle but jumped over the curb, entering a dirt area. This movement and braking caused the calibration machine to break loose and hit inside the wagon, causing the machine to break.

Unfortunately, the form 02.092 Motor Truck Cargo excludes breakage unless it is due to one of the hazards named and according to the form definitions. What happened does not constitute an accident for which we can recommend any payment.

My opinion is:

Due to what was described about the accident, I do not classify it as a "breakage". "Breakage" means "break ". Example would be a machinery that is working and its operation is blocked causing a break.

This is a transportation accident as if the truck had overturned causing damage to the merchandise being transported. They should refer to any definition of breakage to see that this is not a reason to decline this claim.

What is your opinion in this case?

Answer:

After reviewing the policy and the circumstances of the loss, we are sorry for the insured, but it appears that the breakage exclusion would indeed apply to the loss.

When there is no definition in the policy, the courts will go to the standard desk reference for its meaning. The definition of "break" under Dictionary.com is to separate or cause to separate into pieces as a result of a blow, shock, or strain; or to interrupt a continuous state.

The circumstances of the truck suddenly braking, and this causing the damage to the equipment, is excluded by the breakage exclusion. The exclusion provides an exception for "accident" to the vehicle carrying the property if these causes of "loss" would otherwise be covered. However, this loss does not meet the definition of "accident" or "collision", since the vehicle did not come into contact with a vehicle or other object.

Thinking in terms of the carrier, they would look at this type of loss as avoidable if the equipment had been secured such that it would not be jostled in this type of a driving situation.

Debris removal and the pollution exclusion

My hypothetical client has a CP 00 10 with a CP 10 30 causes of loss form. He has insured as stock alcohol for aging inside barrels. Considering that debris removal (unendorsed) is for covered property, if arising out of a covered cause of loss the barrels break and the alcohol spills all over even into a body of water, would debris removal cover this or would the pollution exclusion apply even if the alcohol is covered property?

Answer:

There are certain specified property damages that are not covered under the Debris Removal coverage. Pollution is excluded from that coverage as follows:

2) Debris Removal does not apply to costs to:

(f) Extract "pollutants" from land or water; or (g) Remove, restore or replace polluted land or water.

As such, in the hypothetical you presented, there would be no coverage for extraction of the alcohol from the water.

Under False Pretenses

Our insured sold a vehicle to a customer who used a credit card. The credit card was later determined to be stolen so the bank reversed the transaction.

It is my position that this is exactly what the attached endorsement is meant to cover. The carrier is suggesting that it is not covered because:

b.(s) states false pretense coverage does not apply to a loss which, for any reason, a bank or other drawee fails to pay.

The proximate cause of this loss is the false pretense.

Would you agree with the carrier?

Answer:

As you have indicated, the false pretense exclusion applies to a loss which, for any reason, a bank or other drawee fails to pay.

In our opinion, a credit card company is not considered a drawee. According to Merriam Webster, a drawee is the party on which an order or bill of exchange is drawn, or the party (as a bank) on which a draft is drawn. The credit card company is not drawing on funds deposited with it, unless it's a secured credit card. In that case it is the same as a bank, there is a pool of the person's money available to pay out against any claims against it.

A credit card is in many ways a loan; the card company advances the money based on the person's credit worthiness. Therefore, a credit card company is not a drawee. It is not drawing against deposited cash, it is extending a loan in anticipation of payment. While it is providing money based on the cardholder's use of the card, the payment will not bounce the way a check bounces when there are insufficient funds. A credit card company can rescind payment only once they have determined something is wrong with the account or the cardholder has not been making payments.

More detailed information is included in our discussion on auto dealers coverage and false pretenses. You might find this information helpful.