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


...a vehicle parked within 100 feet of the named insured’s premises, which included the parking lot. This court also found the policy to be ambiguous and that the definition of the term “premises” for purposes of this cause of action included the common area parking lot where the vehicle was parked at the time of the loss.

On appeal, the decision of the district court was reversed. In explaining its decision, the appeals court stated that the policy provision in question covered “business personal property located … within 100 feet of the described premises.” The pertinent premises described in the policy Declarations included reference to “Suite C-5.” The named insured’s interpretation, the appeals court explained, requires us to omit “Suite C-5” from the description of the insured premises in the Declarations of the policy. The district court’s ruling, the appeals court said, meant that the policy covered business personal property within 100 feet of 13945 North Highway 183, which could include any portion of the entire shopping center, along with its parking lot and other common areas.

The court went on to say, however, that the parties clearly expressed their intent in the policy that the insurer cover the named insured’s salon located in “Suite C-5” of the shopping center. Had the parties intended to cover the entire shopping center, the court added, they would not have inserted “Suite C-5” into the description of the covered premises. The court concluded that it was only the interpretation urged by the insurer that gave effect to all elements of the premises description on the Declarations page.

If the policy Declarations simply gives an address and no suite or office number, the premises includes the building and all of the land at that address. This means that the “100 feet” does not begin at the building’s edge. So, for example, if business personal property is in a truck and located 50 feet from the premises boundary, which turns out to be 300 feet from the building, the property is still within the 100 foot limitation.

It is important to remember here that the 100 foot limitation applies not only to the named insured’s business personal property, but also when coverage applies to business personal property of others — whether or not leased — that is in the named insured’s care, custody or control.

When the covered property is off-premises (at a lower limit), coverage applies within the coverage territory, which is defined in the Commercial Property Conditions CP 00 90 as the United States of America, its territories and possessions, Puerto Rico and Canada.