Sometimes It's What the Policy Doesn't Say That Counts!

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...for which they are responsible as described under…”

This effectively widens the scope of the relationship between the policyholder and the property insured, and attempts to provide coverage on any property that comes into the possession of the insured.

Challenges of a Broadened Property Definition

In the case of policies issued in the United States, this type of definition would rarely be used because the standard commercial Building and Personal Property Coverage Form (CP 00 10 06 07) includes personal property of others that is in the named insured’s care, custody or control and located on their premises. Additionally, there is some limited additional coverage for newly acquired property built into the policy. Therefore, a broadened definition of property would probably be relegated to something very exotic, which normally should be covered in a marine or special form.

In other countries this definition may still be useful based on the local policy language. But as with the broadened named insured, accurate valuation may become a major headache for the policy constructors.

Being Proactive

Suffice to say that these definitions or similarly general definitions can play an important role in helping a corporation avoid the predicament in the case study — inadequate reimbursement due to coverage that was too narrowly defined. On the other hand, they bring their own significant challenges. The benefit is that they will allow all parties to think about the possibilities and provide an opportunity to address the insurable interest dilemma proactively initially or at renewal, rather than after a claim.

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1 This is the language incorporated in the standard U.S. ISO Building and Personal Property Coverage Form (CP 00 10 06 07) but would be common in some related form in most property contracts in all countries.

“… these definitions or similarly general definitions can play an important role in helping a corporation avoid the predicament in the case study — inadequate reimbursement due to coverage that was too narrowly defined.”


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