Being a Named or Additional Insured Not Always Necessary for Coverage

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...CP 00 10 which, as noted earlier, includes coverage for the property of others situated within 100 feet of the building or within 100 feet of the premises described in the Declarations, whichever distance is greater. The preamble of this form states that the insurer “will pay for direct physical loss of or damage to covered property at a covered location from a covered cause. Covered property consists of the described (1) building or structure, along with fixtures and equipment, (2) the named insured’s business personal property, or (3) personal property of others.”

Given that the payment of loss or damage to the property of others is for the account of the owner, all the insurer has to do is determine the facts of the matter, the value of the property, the limits, any policy limitations — and pay the loss. The coverage under this form assumes, of course, that it was specifically purchased by the insertion in the Declarations of a limit. The owner of a boat while at a marina in the case of Kenneth Pizzetta v. Lake Catherine Marina, LLC, 995 So. 2d 26. (La. App. Cir. 2008) did not find this out until after loss to his watercraft that was in the marina’s possession for repairs.

The owner of the boat brought it to the marina for repairs and refurbishment. The boat, however, remained at the marina for nine months until Hurricane Katrina struck the area. Having sustained damage to his boat, the owner argued that he was entitled to coverage under the “Personal Property of Others” provision of the marina’s policy. While that coverage applied to property in the marina’s (named insured’s) care, custody or control, the coverage required that a limit be inserted in the Declarations. None, however, was inserted for two categories: (1) Your Business Personal Property, and (2) Personal Property of Others. Therefore, no coverage applied.

The boat owner attempted to raise an issue of material fact concerning the marina’s diligence and prudence with his contention that he was told that his boat was safe because “hurricanes don’t come this way.” The implication of his contention was that because the marina had a lack of concern about the approaching storm, it failed to take proper precautions given that it would have taken at least four hours to complete the repairs on his boat.

The marina maintained, however, that faced with the possibility of a storm, rather than spend time repairing the boat, it made the decision to place extra boat stands under all of the vessels in its care, custody or control. This step, they said, proved to be sufficient in the past. In effect, the court found that the undisputed actions taken by the marina in preparation for the storm were, as a matter of law, sufficient to fulfill the marina’s obligations with diligence and prudence, and that the alternative suggested by the boat owner did not raise an issue of material fact.

The marina here appeared to be lucky that the loss to the boat did not occur under less intensive means since, as a bailee, in a bailment situation the ending could have been different. It also behooves bailees to check their policies having to do with coverage at all times — especially when they are bailees.

Conclusion

This article is not meant to present an exhaustive discussion of the subject. We hope to have pointed out, however, that while it is advisable to be an...


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