“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.

However, 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 Use the ISO CP 14 10 – Additional Property Covered endorsement which says, “The following is withdrawn from PROPERTY NOT COVERED and added to COVERED Property….”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.

To 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.

In July, we presented "Finding and Fixing Personal Lines Coverage Gaps" and the recorded version of this webinar can be found by clicking here.

Last Updated: July 27, 2016​