On 12/6 from a severe windstorm that hit our area in NY, a large tree fell across their driveway, hitting an electrical pole in the process.

The tree was able to be removed, however the pole was damaged, loosening the wires. The home was not damaged and power was not interrupted.

Con Ed (The power company) showed up and advised the insured, the pole was on their property at the end of their driveway and they refused to touch it. Told them to get a commercial electrician to fix or replace the pole.

Is there coverage under a typical home policy for the damaged pole and electrical work? (They have the equivalent of an HO5 with Farmers/Foremost Signature)

To reconfirm, there currently is no loss of power or damage to the home. The pole is a few hundred yards from the house.

ANSWER: 

Based on what you've told us, we think the pole would be the same as any other structure and would be covered. An other structure doesn't have to be a building, it just has to be constructed. So whether it's a gazebo, swimming pool, swing set or in your case a utility pole, there would be coverage. There are no exclusions that would apply.

Multiple Damages to Roof

QUESTION:

We have a claim for a partial building collapse. There is a dispute in the collapse claim as it pertains to the replacement of the roof system. The roof was damaged in a prior claim in 2015, and the roof was repaired, depreciation was never requested or released. The 2021 collapse claim continues to be in dispute, and in the middle of litigation.There was a recent storm that damaged the roof, and a temporary wall that was built because of the collapse in 2024. The same insurer continues to insurer the building.The question is, if it is determined that the roof was damaged in the 2021 claim and the 2024 claim, does the insurer owe for the ACV benefits on both dates of loss, and only the recoverable depreciation on the one of the DOLs? We note the insurer insured the building in 2024 in the condition that it was in, and had an extensive claim file underwriting the building's condition, the insurer did not exclude any future damage to the roofing system. It would appear to me that the 2024 claim's calculation for depreciation would encompass the 2021 claims damage, and the RCV would be owed for the 2024 claim.

ANSWER:

When there are two separate loss occurrences separated by time, then each claim will be adjusted separately. The 2021 claim apparently hasn't been finalized and from what you describe the same portion of the roof was affected by both loss occurrences. In this case, the 2024 claim would be adjusted based on its actual condition at the time of loss, regardless of why it was in that condition. The insurer would still have the same RCV or ACV valuation options for that loss. The insurer would indeed still owe for the 2021 loss. However the insurer chooses for the valuation, the recovery should put the insured back to their same financial position as prior to the 2021 and 2024 losses. As such, if the 2024 damage cannot be separated from the 2021 claims damage, then we agree with you that the RCV would be owed for the 2024 claim.

Loaned Generator Damaged by Contractor

QUESTION:

We have a client that is a distributor of generators (large generators situated on trailers), used for backup for hospitals. They "loaned" a generator to a hospital for a replacement while a new generator was on order. An electrical contractor hired by the hospital backfed electric to generator and damaged it. The electrical contractor submitted a claim to their GL carrier and they agreed to pay $10K , under Broad Form Property Damage endorsement, on the GL policy, however the total repairs are $45K.

We submitted a claim to our client's property policy with CP 00 10 10 12 and Contractor's Equipment Form CM 70 97 03 12, this generator was listed as scheduled equipment.

Claim was denied under Contractor's Equipment Form since property not covered includes leased or rented property as well as loaned property.

We asked the carrier to look at the Property Off Premises under the BPP form , which has an increased limit of $50k and the policy is also endorsed with a proprietary endorsement for equipment breakdown.

They have responded citing the attached under property not covered exclusion under the BPP form.

My argument is the scheduled equipment is excluded when rented/leased/loaned. Scheduling the equipment provides broader coverage and higher limits, however when it's rented/leased/loaned, why can't we look to the BPP form to provide some limited coverage? My understanding of the intent of the attached exclusion was to prevent multiple recoveries for a single loss.

ANSWER:

The described loss is the sole negligence of the electrical contractor. However, it falls within the property damage exclusions for your work or your product, since the GL form does not cover property damage caused by the contractor's faulty work. In this case, the contractor's insurer is agreeing to pay $10,000 under the broad form property damage endorsement, but it is not covering the contractor's negligence. The insured distributor has the right to bring suit against the contractor for faulty workmanship.

There is no coverage under the BPP policy for this loss because the property damage was not due to a "specified cause of loss" under the policy.

The purpose of the cited exclusion is to preclude coverage for stacking of limits or multiple recovery for the same loss. Since the insured has received limited recovery of $10,000 under 'another policy', the exclusion bars recovery under the BPP policy, regardless if the loss was a covered loss, which it isn't.

Christmas Card Question - Stolen Art

QUESTION

Good morning. Our insured is a university and has a regular ISO CG 00 01. Our insured contracted with a firm for decoration and the preparation of Christmas cards. Turns out the firm contracted violated or committed a copyright infringement with a painter that was the owner of the art used on the Christmas cards. Am I too crazy for expecting the insurer to defend my client in the suit until proven he in fact shares responsibility with the firm contracted for the infringement? Carrier has said that there is an applicable exclusion ( i of coverage B).

ANSWER

Under the CGL, the insurer is liable for providing a defense for the insured unless the exclusion is such that it totally precludes any coverage under the policy and there is not even a slight chance there could be any coverage available to the insured. In this case the insured did not actually print the cards but rather relied on the contracted services. The insured would not be expected to know about the ink infringement since their business is not a printing company, and they have no control over the printing contractor's operations. Further, looking at the definition of "personal and advertising injury", none of these were what the insured was involved in. They were not advertising, just sending Christmas cards.

Because of the contractual arrangement with the printing company, there should be coverage for the insured's defense in this matter. Even though there is an exclusion for contractual liability, it would not apply in this case since the insured could be held liable for damages even if there were no contract in place.

Lightning Strike and Charging Electric Vehicles

QUESTION

I have a lightning strike claim in which the adjuster is refusing to use my logic when it comes to charges for the client's EV ALE charges. Since the insured can't use his house charger, he is having to go charge at an EV charging station and pay a premium rate. I presented by argument as such

1)I strongly disagree with your statement regarding the Tesla charge. You cannot track mileage in an EV like you would a gasoline powered vehicle. The insured could have charged his car much cheaper at home versus at a public charging station. Same theory as buying a soda at the movies versus your home costs for a can of soda. Both Kelly Bluebook and Popular Mechanics agree that the average cost for a home charge is $0.16 per kWh. However, Texas electricity rates is 7% lower than the national average. Therefore, I am proposing that a home charge would have cost about $0.14 per kWh. If you deduct $0.14 from the charging station rate, this should be the additional cost that the insured is incurring for every charge.

We cannot treat an EV charge with the same tools we use to calculate additional charges for gasoline powered vehicles. With a gas-powered vehicle, your only option is to fuel at a gasoline station with the gas rate per gallon is within a few cents. However, with EV, the owner can fuel at home for a much LOWER rate than the EV charging station is charging him.

I agree that the mileage needs to be factored in as well, but you cannot ignore the premium you have to pay at the charging station. Is there a calculation for the additional mileage for an EV?

ANSWER

Is there damage to the dwelling that has made it unfit to live in? Has the insured had to relocate to another location? If so, then that should have been factored into where the insured is staying - many hotels have electric charging stations. It would make sense that the insured be temporarily located in a facility that can also charge his vehicle.

ALE only applies if the premises is not fit to live in. If the insured premises is habitable and only the electric vehicle charger was damaged, then there would be no coverage for charging the electric vehicle. Motor vehicles are excluded under Property not Covered, and the exception is for motor vehicles not required to be registered for use on public roads which are used solely to service a residence or are designed to assist the handicapped. If the insured is driving to a public charging station, then his vehicle is licensed for public roads and as such is excluded for coverage. Any increased charging expenses because the vehicle charger is damaged is not enough to trigger ALE; the premises must be uninhabitable for the insured for ALE coverage to apply.

Cows vs Cars

QUESTION

I am working on a claim where the insured’s cows got out of the enclosure and were involved in MVA. The location where the insured kept the cows is not scheduled on the policy. I don’t think it meets the definition of insured premises.The insured leases the pasture from another person to keep his cows there in exchange for them keeping the grass down and the insured maintaining the fencing.The policy has the below exclusionary language: "We" do not pay for a loss if one or more of the following excluded events apply to the loss,regardless of other causes or events that contribute to or aggravate the loss, whethersuch causes or events act to produce the loss before, at the same time as, or after theexcluded event.1. Exclusions That Apply to Coverages L and M -- This Personal Liability Coveragedoes not apply to:i. "bodily injury" or "property damage" which results from premises that areowned, rented, or controlled by an insured" and that are not the "insuredpremises". However, "we" do pay for "bodily injury" to a person in the courseof performing duties as a "domestic employee".And under the definition of insured premise is says this:10. "Insured Premises" means:b. the farm premises described on the "declarations";(not scheduled on the policy)c. other land "you" use for "farming" purposes and new farm premises acquired by "you" during the policy period; (insured admits in his recorded statement that he has been leasing this location for 2-3 years)e. all vacant land owned by or rented to an insured". This includes land where aresidence or farm structure is being built r the use of an "insured";I was wondering if a farmer keeps and maintains livestock on a parcel of land, if that would not be considered vacant land in GA. I checked with an attorney and since there is livestock on the land, he believes it would not legally be considered vacant as it is in use.Definition c is more at issue.If the insured is using the land for farming, does it need to be on the policy during the policy period or is that just for premises acquired. The word “and” in that provision is questionable in my view and I can’t tell if it means land the insured uses and acquires for farming must be on the policy (during the PP) or if it is just the land the insured acquires. If it is both, I think the loss location is not an insured premise and is excluded for coverage.

ANSWER

The policy defines "farming" as follows:

"Farming" means the ownership, maintenance, or use of premises for the

production of crops or the raising or care of livestock, including all necessary operations.

"Farming" also includes the operations of roadside stands and farm markets

maintained principally for the sale of the "insured's" own farm products, but it does

not include other retail activities.

Note that "farming" is not considered a business, so no business exclusions would apply. What exactly does the insured do with the cows? Does he sell them for beef or sell milk or cheese, or are they pet cows? If he sells any parts of the cow or uses them for breeding purposes, we would consider that farming.

So caring for cows is considered "farming". Then the definition of "insured premises" includes: c. other land "you" use for "farming" purposes and new farm premises acquired by "you" during the policy period;

When we look at c. we see two separate clauses that are not dependent on each other. The other land used for farming is considered insured premises, and new farm premises acquired by the insured during the policy period are also considered insured premises. The wording is awkward, but other land is not necessarily newly acquired premises. With it being ambiguous, I think the insured gets the benefit of the doubt. Had the writers of the policy intended insured premises to mean newly acquired farm premises acquired during the policy period that is used for farming purposes, it could have been worded that way.

Purpose and Effect of CG 21 39 Contractual Liability Limitation

QUESTION

I am interested in learning the intended meaning of Form CG 21 39 10 93

Contractual Liability Limitation

Products Completed Operations Liability Coverage part

Is this form intended to eliminate the exception to the Contractual liability exclusion (2) only in products completed ops.. ?

In the CGL Form (2) Assumed in a contract or agreement that is an "insured contract" .....

Would ongoing operations still have the contractual Liability exception for 2.b. (2)?

ANSWER:

This endorsement applies to both the CGL coverage part and the products completed operations coverage part, so it does not apply to products completed operations only. CG 21 39 removes the definition of "insured contract" and replaces it with the definition in the endorsement. Without the endorsement, the policy includes coverage for bodily injury and property damage assumption of liability under the described types of contractual agreements, whether written or oral. By including this coverage in the form automatically, the named insured does not have to send the contracts involved to the agent or broker each time he or she enters into an agreement.

However, when endorsement CG 21 39 is added to the policy, it removes the coverage for any assumption of liability in an "insured contract" for third party tort liability (that would otherwise be provided for in the exception to exclusion 2.b.(2) in the CGL form). So if the endorsement is attached to the CGL policy, there will be no exception, and therefore no coverage, for liability assumed in the "insured contract", thus eliminating coverage for third party tort liability. Part f. of the "insured contract" definition in the CGL form defines tort liability in an attempt to clarify the kinds of contracts not considered to be contractual for purposes of contractual liability coverage. By adding the tort definition, the intent is to clarify that breach of warranties involving products and work in relation to contractual liability coverage are not tort liabilities. For example, any warranty of the fitness or quality of the named insured's products or warranty that work will be performed by or on behalf of the named insured will be done in a workmanlike manner are considered to be contractual assumptions of liability, whether expressed or implied.

Ongoing operations, with respect to "insured contracts" will not have coverage for tort liability since the definition has been changed to remove part f. of the definition. Liability that the insured would have for bodily injury and property damage outside of an "insured contract" is not affected by the endorsement. With attachment of the endorsement, the only contractual liability exception that exists is 2.b.(1).

Since exception 2.b.(1) is not tied to the definition of "insured contract", there is still an exception for bodily injury and property damage liability that the insured would have regardless of, or outside of, any contract or agreement. In simple terms, everyone has a common law obligation or duty to exercise care so as to not impair the health, safety and welfare of others. Therefore, if a person through his or her acts or omissions causes accidental injury to another person or damage to that person's property, the party causing that damage is responsible for such actions, whether or not there is any promise to do so. That common law duty is embodied in the law of negligence and other torts (civil wrongs). Tort obligations are imposed by law and these are the types of obligations that are excluded by endorsement CG 21 39. So, if an insured's conduct, such as negligently causing a premises hazard that results in a third party's injury, gives rise to liability independent of the fact that a contract existed between the indemnitee and indemnitor, the claim would be in tort, i.e., a civil wrong. On the other hand, if the insured's conduct only gives rise to liability because of its failure to comply with some promise, the claim for damages would be for contract, not tort, and therefore not subject to subpart f. of the "insured contract" definition; thus falling under exception 2.b.(1). Since common law liability involves liability for damages that the insured would have in the absence of a contract or agreement, the more appropriate way to categorize the coverage provided by 2.b.(1) is premises-operations liability, rather than contractual liability.

If you have a specific claim situation with regards to ongoing operations we will be happy to take a look at that if you provide us with the details.