Why do I need Care, Custody & Control or Voluntary Property Damage Insurance Coverage?
General Liability Insurance coverage is very broad, in fact it covers your premises, your products, your operation and your personal and advertising injury. But it still does not cover everything.
There are two types of claims that most of our clients, assume are covered by a basic general liability insurance policy which are not covered. Care, custody & control and Voluntary property damage coverage are not covered by unendorsed general liability insurance policy. The names of these coverages seem difficult to understand, so I’ll explain why your business needs these coverages.
A general liability insurance policy excludes personal property that is in your care, custody and control, including something that you are working on. In insurance this issue of care, custody & control frequently arises. Let’s examine what these terms mean. Care generally means to have “temporary charge of”, custody means “to keep or guard” and control means that it is “within your power to manage, or oversee”. For those that have large exposures; you may need items like Bailee coverage or warehouseman’s liability or garage keeper’s coverage. But, if the care, custody & control exposure is incidental to your business it can generally be purchased as an additional coverage to the liability insurance policy. One limitation of the care, custody & control coverage on the general liability policy is that you must be legally liable should you cause damage to personal property.
Let me give you some examples on how care, custody and control could apply to your business:
- Janitorial Company: You are cleaning your customer’s home and you are dusting the 60” television that is hung on the wall. In doing so it moves and comes of the bracket, falls to the floor and breaks. This would not be covered without care, custody & control endorsement.
- Contractor: While coming out to the client’s home to paint or do contracting work, they left a table in the way of your work area. You pick the table up to move it and in doing so you break a leg off the table. The damage to the table would not be covered without care, custody & control coverage.
- IT Firm: You are at the client’s business and you are working on their laptop. You get up and the cord is caught and the laptop crashes to the floor and is damaged. The damage to the laptop would not be covered without care, custody & control coverage.
Generally care, custody and control coverage is limited to a specific dollar amount, so talk to us to determine which coverage amount would be appropriate for you.
The second coverage that I would like to discuss is voluntary property damage or some carriers will refer to it as extended property damage or real property damage.
This is similar to care, custody & control but rather than paying for damage to personal property, voluntary property damage applies to damage to real property. This coverage provides unintentional damage to the real property of others.
Let me explain to you how this coverage could apply:
- Power washing company: You are hired to wash the exterior of an office building. In the progress of washing the building the nozzle comes lose and goes through the building window.. The glass damage would not be covered unless you have voluntary property damage coverage
- HVAC Contractor: You are drilling holes in the hardwood floor to install a new HVAC system, the drill slips and damages the hardwood floor. The damage to the hardwood floor would not be covered unless you have voluntary property damage coverage.
- Janitorial Company: You have been hired to clean the client’s home and in doing so your vacuum cleaner scratches their hardwood floors. Since you were hired to clean the floors this would not be covered unless you had voluntary property damage.
- Painting Contractor: You were hired to paint a wall and in doing so your ladder damages the wall. This would not be covered without voluntary property damage.
Just like with the care, custody & control insurance coverage there is a limit of coverage provided with the endorsement. It is always best to discuss with us what limit would be the most appropriate for your business. Another way to get broader voluntary property coverage is to purchase contractor’s errors and omissions insurance coverage which is designed to cover your work. Give us a call to discuss how this coverage could work for you.
Many times claims are paid or denied because of the existence or non-existence of these important coverages. The cost for these coverages is only a few hundred dollars per year, but without them you are leaving huge holes in your liability insurance protection
Give us a call to discuss your business so that we can put together a comprehensive plan for you and your business.
Huff Insurance is a full service Independent Insurance Agent We have been dedicated to Protecting Lifestyles™ since 1960. We offer a full array of Personal Insurance, Commercial Insurance and Life Insurance & Health Insurance products. Call us at 410-647-111