Understanding the Care, Custody or Control Exclusion

May 12, 2023 | Business Insurance

American drivers see a lot on their travels, travelling more than 13,000 miles year on average. It’s also one of the last locations you want to run into furry pals when you’re moving at 40, 50, or even 60 mph or more. We rarely take the time to evaluate the scope of the problem, even though it is a significant safety issue that claims both human and animal lives. Over 260,000 accidents involving animals occur every year, resulting in 12,000 human injuries and more than 150 fatalities.

To prevent depressing statistics like the ones above, it’s crucial that we remove wildlife from roadways in a safe manner so that they don’t damage themselves or vehicles.

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How often do animals meet our roads, shoulders, and medians? Do humans employ the same strategies to fend off these creatures? Do some regions of the United States have a higher likelihood of animal-related accidents? Continue reading to learn the responses to these questions and the feelings of more than 1,000 other Americans who have encountered an animal on the road.

It may not come as a surprise that deer were the most often observed animal by survey participants given that there are over 30 million of them in the United States. Deer accidents are expensive even if they may appear majestic. Each year, $4 billion is lost due to animal collisions.

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This exclusion has many complexities, and each case’s outcome will vary depending on its particular facts. What the CCC exclusion does not include cannot be answered in a generalized way. The question of whether a piece of property is in the care, custody, or control of the insured might change drastically depending on seemingly minor changes in the circumstances, such as how much access the owner has to the damaged object. In court decisions involving the CCC exclusion, it is often decided that for the exclusion to apply, the insured must have absolute control over all parties and that power cannot be transferred with any other body.

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Exclusions related to care, custody, or control are frequently applicable to bailed property, which is defined as property held by one person but owned by another. The owner of the property is known as the bailor, and the person who oversees it is known as the bailee. No ownership is transferred during a bailment. Upon expiration of the bailment, the bailee is required to return the property to its lawful owner.

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A lot of companies serve as bailees. Some keep other people’s belongings in their possession for storage or to make repairs. Some people rent or borrow property to use for their business. Here are a few scenarios where bailments are frequently used:

You run a restaurant that offers valet parking for patrons’ vehicles.

To use it for your farming business, you have hired a combine harvester.

Your auto body shop is yours. For the duration of the repairs, your company is in temporary ownership of clients’ cars.

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You run a restoration firm for fine arts. You are looking over a pricey vase that a customer left with you to fix when it escapes your grasp. The vase breaks when it hits the floor and falls.

Your cafe is yours. You borrowed an espresso machine from a local coffee shop because yours is broken and you need to use it until it can be fixed.

For a specific reason, you are in possession of someone else’s property in each of the cases. When that goal has been achieved, you must return the item to its owner. The owner may file a claim for property damage against your company if the property is damaged before you return it to get compensation.

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Basic Liability Insurance:

The care, custody, or control exclusion may be found in ISO General Liability Policy’s Coverage A, Bodily Injury and Property Damage Liability. It can be found in a section of exclusions called Damage to Property. It does not provide coverage for harm to:

Personal property under the insured’s care, control, or supervision

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It’s crucial to remember these three things. The care, custody, or control exclusion firstly only applies to personal property. Real estate is not covered by it (land or buildings). Building damage is covered in other sections of the Damage to Property exclusion. Second, “care, custody, or” not “care, custody and control,” is the term used in the exclusion. As a result, “care,” “custody,” and “control” are typically viewed separately. Thirdly, the insured’s care, custody, or control of any personal property is subject to the exclusion. The insured in a liability insurance policy typically refers to the insured party identified in a claim or lawsuit.

Prevent Coverage Gaps:

Make sure you have adequate coverage in case a customer’s property is harmed while in your care. This will help you avoid having a claim dismissed due to the exclusion. A garage keepers’ policy or inland marine coverage are just two examples of the various specialist policies that are available to appropriately protect you and your company.

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Make sure you have adequate coverage for any property that your CGL may not cover owing to the care, custody, or control exclusion by getting in touch with your Tanner, Ballew, and Maloof broker right away.

With one exception: Sidetrack agreements

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A sidetrack agreement’s obligation is not covered by the care, custody, or control exceptions mentioned above. A sidetrack, sometimes referred to as a spur, is a brief stretch of railroad track that connects a commercial building to the main railroad line. A sidetrack agreement is a legal agreement between a railroad and a company under which the railroad permits the company to utilize a sidetrack. In exchange, the company pledges to hold the railroad harmless for any third-party property damage brought on by the company’s careless usage of the sidetrack.

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It’s crucial to comprehend what your policy covers and excludes, including care, custody, and control exclusions, with all insurance products. You can ensure that you are protected for both liability and the property of third parties that you are obligated to safeguard by adding the appropriate choices to your company insurance.

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