Retail Observer

RETAILOBSERVER.COM AUGUST 2014 62 RO Paul Mac Donald—Executive Director, United Servicers Association. For more information, call 1-800-683-2558 or visit www.unitedservicers.com. S E R V I C E D E P A R T M E N T T he Care, Custody and Control Exclusion in Commercial General Liability Insurance is one of the most misunderstood terms today. It is the cause of many coverage disagreements and discrepancies. This exclusion eliminates coverage for damage to property in the insured's care, custody or control. The cause for confusion is that the definition of each word (care, custody and control) can easily be misinterpreted in real world application. Typically, the word "care" is defined as property that is in "temporary charge" of the insured. "Custody" suggests "keeping or guarding;" in other words, the insured is accountable for the property. And the word "control" refers to power or authority to operate, direct or supervise the personal property. It is also important to understand that this exclusion pertains only to personal property and not property such as buildings and permanent fixtures. Most court cases have considered care, custody and control to mean actual possession or direct physical control of the property as opposed to actual ownership. Now that you have a better understanding of what the Care, Custody and Control Exclusion is, do you know why it is important and how it affects you? Originally, it was thought that without the Care, Custody and Control Exclusion, that technicians and servicemen would be careless with the property of others knowing that their claims would be paid by their insurance company. Therefore, the Care, Custody and Control exclusion became standard on all General Liability policies to protect the insurer. This may be problematic, especially to the service industry, in that it can infuriate a customer should their property become damaged while in your care. Under the Care, Custody and Control exclusion, your insurance carrier can deny a claim under this exclusion and should you not be able to afford to fix or replace the damaged property of your customer, you will mostly likely have an unsatisfied customer and could create an even bigger liability for yourself. For example, the ice maker of a customer's refrigerator/freezer stops working and you send a technician to repair the ice maker. In the process of fixing the ice maker, the technician tilts the refrigerator and dents both doors on the unit. Fixing the doors cost more than the refrigerator is worth and the customer wants the doors either fixed or the unit replaced. Under the Care, Custody and Control exclusion, your insurance will deny your claim and you will be solely and financially responsible for the replacement. However, there are solutions to this problematic exclusion. Most insured's are not aware that for less than $200, you can 'buy back" the Care, Custody and Control Exclusion and receive $10,000 worth of coverage for accidents such as the example given. If you are interested in learning more about this complicated aspect of your General Liability policy and possible solutions, you can contact Neal McConnico at United Servicers Insurance Service. He will be more than happy to answer any of your questions or provide you with guidance to help you avoid and claim disputes involving Care, Custody and Control. Many USA members have sought quotes on their liability, automobile and property insurance under the United Servicers Program and have received savings anywhere from $700 to $25,000 in their insurance premiums. Don't just renew with your current broker until you are sure that he or she has shopped your policy for the best price. Quotes for insurance are free and there is no obligation. Please call Neal McConnico at United Servicers Insurance Services if you have any questions regarding your business insurance needs. You'll be pleasantly surprised. WHAT SERVICERS NEED TO KNOW ABOUT GENERAL LIABILITY

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