Author: VU Faculty
“In the ISO CP 00 10, Property Not Covered includes 'Bulkheads, pilings, piers, wharves or docks.' We are seeing some inconsistency among carriers in their interpretation of this property exclusion. How we interpret this provision is that it applies only to property which is permanent and non-removable from the water. In our area we have many lakes where you see portable docks that are removed each winter. One insurer considers these docks to be business personal property while another does not. Our argument is that bulkheads, pilings, piers, and wharves are all permanent structures, so the term 'docks' would also be referring to permanent dock structures. We are currently going through a dock claim that is being denied due to their interpretation of this policy provision even though the loss was caused by a covered peril.”
The CP 00 10 does not distinguish
between real and personal property under Property Not Covered, so it doesn't
matter whether the property is a permanent structure or not. This class of
property is excluded because it is highly susceptible to loss. In your case,
your best argument is likely that, when the dock is removed from the water,
it's no longer a "dock" and, therefore the exclusionary language does
not apply while it's out of the water. That argument is probably a longshot.
there is a solution that is simple (if you can get the underwriter to do it).
Use the ISO CP 14 10 – Additional Property Covered endorsement which says, “The
following is withdrawn from PROPERTY NOT COVERED and added to COVERED
Property….” Then you indicate the policy paragraph for the category of excluded
property, describe what you want to cover, and indicate whether it’s building
or personal property by agreement with the underwriter.
This is a
great illustration of how important it is to know what policy forms are
available to address uncovered exposures. Policy forms knowledge keeps your
customers from having uncovered losses and the agency from having E&O
claims. We invite you to join us on Tuesday, August 23 for a two-hour webinar
entitled, "Find and Fixing
Commercial Lines Coverage Gaps" presented by Bill Wilson, CPCU, ARM
and John Eubank, CPCU, ARM. The webinar will discuss endorsements unilaterally
applied by the insurer that create coverage gaps, endorsements you should ask
for to prevent coverage gaps, policy exclusions that can be handled but rarely
are, policy forms that don’t do what you think they do, and policy forms that
do what you think they don’t do.
register for this webinar, click
here. The cost is only $59 for two hours of high quality, practical
education, and if you don’t need CE or the webinar is not approved for CE in
your state, everyone in the agency can participate as a group in this webinar
or view it later in its recorded version for that single price of $59. You
can’t afford not to attend...just one of the 40 or so examples of CL coverage
gaps we provide may save you a HUGE E&O claim.
we presented "Finding and Fixing Personal Lines Coverage Gaps" and
the recorded version of this webinar can be found by clicking
Last Updated: July 27, 2016