An insured has a commercial general liability policy and a business auto policy with different carriers. The insured delivers a refrigerator to a customer. Once in the house, the insured takes the fridge off the dolly to maneuver a small space, but while moving the fridge by hand they scratch the floor. 

Q: Is the damage to the floor covered under the CGL or the BAP?

Response 1: Yes and turn in a claim to both. In general, when moving an item by hand—including hand cart and dolly—it's an auto exposure until it's in place. If it's being moved by a mechanical device not attached to the auto, it's CGL. Looks like BAP in this case.

Still, submit a claim on both. The carriers are probably going to point at each other and you're probably going to wish these were with the same carrier.

Response 2: I use this exact situation in class all the time. Auto! It's not CGL until it's in the place where it's finally delivered. That's where it's going to sit for the next 11 years collecting dust bunnies and Cheerios.

Response 3: Based on the ISO "handling of property" exclusion, the loss would be covered under the BAP. There would be no coverage under the ISO CGL since it excludes autos—including loading and unloading.

Response 4: Assuming that both the CGL and BAP are on a current version of the ISO form, coverage would exist in the BAP. 

The insuring agreement in the CGL Coverage A – Bodily Injury and Property Damage promises that the carrier will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies. 

The trigger of coverage is an “occurrence" in this coverage part. The relevant exclusion for the situation you describe would be Exclusion G: Aircraft, Auto or Watercraft. This exclusion indicates that bodily injury or property damage arising out of ownership, maintenance, or use or entrustment to others of any auto is excluded and—very importantly—indicates that use includes “loading or unloading."

The definition of “loading or unloading" in the form means the handling of property after it is moved from the place where it is accepted for movement into or onto an auto; while it is in or on an auto; and while it is being moved from an auto to the place where it is finally delivered. 

As the property you describe was being moved from an auto and had not yet been finally delivered, this exclusion in the CGL would be active.

The insuring agreement in the BAP promises that the carrier will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which the insurance applies, caused by an “accident" and resulting from the ownership, maintenance or use of a covered auto. Notice that the BAP does not require an auto accident—instead it only requires an accident. 

Two exclusions in the BAP—Handling of Property and Movement of Property by Mechanical Device—indicate the presence of coverage in the BAP for what can be considered loading or unloading from or with a covered auto. These exclusions are active before property is accepted for movement into or onto the covered auto and once the property removed from the covered auto has been finally delivered and also indicate that bodily injury or property damage that results from movement of property by any mechanical device other than a hand truck or a mechanical device that is attached to the covered auto would be excluded. 

Since the property damage was caused after the property was accepted for movement— assuming that the vehicle used is a covered auto in the BAP and the property had not yet been finally delivered, and no other exclusion appears to be in effect—the care, custody or control exclusion, for example—coverage will exist, subject to policy limits in the BAP.

Response 5: If these are current ISO CGL and BAP forms, moving property by hand or with a hand truck is an auto exposure until the delivery is completed. This is one of the main reasons it's usually a good idea to place both CGL and BAP policies with the same carrier, especially if the business includes delivery and pickup.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.