Loading and Unloading…CGL or BAP?

The BAP covers loading and unloading of a vehicle if done by hand, hand truck or a mechanical device attached to the auto. The CGL policy picks up the exposure if property is moved by an unattached mechanical device other than a hand truck. So, the question is—what is a hand truck?

Is a hand truck a two-wheeled upright device? Can a hand truck include a four-wheeled dolly? In one claim, property was being unloaded with the latter. The CGL was written by one carrier while the BAP was written by another carrier.

So, of course, the CGL carrier said the dolly was a hand truck and covered by the BAP and the BAP carrier said a dolly is not a hand truck and so not covered by their policy.

In researching this, the Big “I’ Virtual University checked out several Web sites. Two of them sold hand trucks. One of the sites had only two-wheeled devices, while another site had both two and four-wheeled models.

So which is it? The answer—there isn’t one. That’s why there are courts. And this is yet another example of the pitfalls that often arise when splitting coverage among insurers. To read the full article, including all of our VU faculty opinions, click here.


Accidental Discharge vs. Surface Water

Your insured’s lawn sprinkler system develops an underground leak which floods the basement. Or their forgetful teenagers on leaves a garden hose running and, overnight, water accumulates, runs into a basement window and floods a large area. Are these claims excluded by the HO surface and underground water exclusionary language?

The full Virtual University article examines five scenarios that have come through the VU’s “Ask an Expert” service in the past year. Some insurers will pay for this under the peril of accidental plumbing discharge, while others will insist it’s excluded as surface water. One VU faculty member has this to say:

“The flood exclusion is a concurrent causation exclusion. Surface water, even if caused by a burst pipe, is excluded because of the wording regardless of any other cause or event contributing concurrently or in any sequence to the loss.’”

Another faculty member questions whether this is “surface water” as intended by the policy:

“Take a look at the other types of water damage excluded in this portion of the exclusion...they appear to all be naturally occurring ‘flooding’ that arises from bodies of water and/or weather, not from the accidental discharge from a plumbing system.”

To read all of the opinions, including a very convincing one that supports coverage for these types of claims, click here.


Snow Plowing…BAP or CGL?

Say a commercial insured hires an independent contractor to plow his lot. If the insured is sued, under his BAP should he have at least Symbol 8 or9 coverage? In other words, is this a hired or nonowned auto exposure? Or does he need a BAP at all for this claim? Could his CGL policy suffice?

This is what the CGL auto exclusion says: “‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading.’”

The contractor’s vehicle is not “owned or operated by” the insured, nor is it “rented or loaned to” the insured. The contractor is simply performing a service for the insured that involves a vehicle and the exclusion when read literally does not apply to this scenario as long as the other party is not an insured under the CGL.

For several viewpoints on the role of the BAP in covering this exposure, click here.

Bill Wilson (bill.wilson@iiaba.net) is Big "I" director of the Virtual University, an online learning center for agents and brokers.