Business Personal Property of Others: Insuring It Properly Involves Many Considerations


A case in point is Evergreen National Indemnity Company v. Tan It All, Inc., 111 S.W.3d 669 (Tex. App. Dist. 3, 2003) that involved an appeal by a named insured operating tanning salons against its insurer to recover the cost of equipment stolen from one of its trucks. The issue was whether the policy term “described premises” in a commercial property policy covered the business personal property located “within 100 feet” of any portion of the entire shopping center complex in which the insured leased only a suite as its business premises.

The tanning equipment was stolen from one of its trucks while parked at the shopping center. The named insured operated a tanning salon in Suite C-5 of the shopping center. The parking lot in question was a “common area” of the shopping center. The named insured submitted a claim for the value of the equipment, which was stipulated to be over $45,000. The claim was denied because the property was not within the coverage area at the time of the theft.

The policy in question was a commercial property policy (ISO BPP Coverage Form CP 00 10 10 91). There was no question that the named insured suffered a direct physical loss and that theft was a type of loss covered by the policy. The coverage form categorized “covered property” at the premises described in the Declarations as: a. Building b. Your Business Personal Property or c. Personal Property of Others. Your Business Personal Property was defined as: “b. Your Business Personal Property located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises … .”

The parties stipulated that the stolen tanning equipment was business personal property within the meaning of the policy. The Declarations page listed a number of different premises locations. The one from which the theft took place read: “04 01 13945 North Highway 183, Suite C-5, Austin, TX 78717; Frame, Tansyou.” The insurer contended that the policy only covered business personal property within 100 feet of any portion of the shopping center. The truck containing the tanning equipment was parked 280 feet from the entrance of Suite C-5, but in the parking lot and within 100 feet of other shopping center buildings at that address.

Since the named insured leased the premises, the lease agreement was submitted as evidence. This lease gave the named insured certain legal rights regarding the common areas of the shopping center, which included the parking lot in dispute. The named insured paid separately for its proportionate share of the cost of the common area. The landlord required the named insured to park its company-owned vehicles in a certain area in the common area parking lot, and that area was more than 100 feet from the named insured’s storefront.

The named insured was not permitted to park company-owned vehicles within 100 feet of the storefront itself. At the time of the theft, the truck in question was parked in the area designated by the landlord. The lease, however, provided that the common areas were under the “sole management and control” of the landlord. The insurer pointed out that the named insured’s lease granted it only a “nonexclusive right and license” to use the common areas.

The district court granted the named insured’s motion for partial summary judgment. In doing so, the court expressly found that the business personal property that was stolen was taken from...