One Break-In, Two Losses?

We are public adjusters. We have a client with a homeowner policy written by [name withheld] Insurance Company, which is a non-ISO writer. The form that applies covers both perils of fire and theft.

My question regards the number of occurrences when the house is broken into and items stolen, and then a fire is set inside the house. Is this one loss or two? My argument is that the thief chose to commit two different acts, theft and arson, and that the perils are clearly different.

The reason that this becomes important is that policy limits reinstate after each loss, so the insured may make claim for whatever the amount of each loss is, up to the limits available. The insurer believes this to be one loss. What do you think?

Beware Falling Cargo

Our insured was following a tow truck when a tire came off the bed of the truck. The tire bounced into the road and our insured was unable to avoid running over it. The tire caused damage to the bumper and undercarriage of the vehicle. The carrier maintains that this is a collision loss, but we feel that an argument can be made for comprehensive coverage.

We'd appreciate your thoughts. Thank you.

Cereal Killer

Under the boiler and machinery policy, a client who owns a refrigerated warehouse experienced a covered loss of the refrigerating equipment of one of the cooling chambers. In that chamber was stowed a large quantity of garlic, which soon deteriorated. The garlic also was paid under the indirect loss clause attached to the B&M policy.

The issue is that, in the next chamber, there was stowed a quantity of cereal that became contaminated due to the smell of the garlic that had deteriorated due to the change in temperature.

We think that the insurance company also should pay for this cereal under the indirect loss clause attached to the B&M policy, even though the refrigerating equipment of the second chamber was not affected by a direct loss.

Gordian Knot

A client was invited to his boss' house for a social event, a casual dinner and drinks. The boss' father owns the golf course. The boss lives in a house that is on the golf course and owned by his father.

During the evening, they ran out of ice. The boss suggested to the client and a friend to take a golf cart from the golf course's maintenance shed. The boss had a key to the shed and the keys to the golf cart. The client and his friend took out the golf cart to go to the clubhouse and get ice. It was about 8:30 on a January night in Colorado.

On the way to the clubhouse, the client and his friend got stuck in the mud. Using a two-way radio, they let the others know that they were stuck. Other guests and the boss took the water wagon out of the shed to go help them out.

While the boss was doing that, the client and his friend managed to unstick the golf cart. The boss instructed another guest, who also is a maintenance employee at the golf course, to take the water wagon to help them out. This guest/employee knew that the headlights on this particular vehicle were not working. Nonetheless, he proceeded to drive this vehicle toward the clubhouse in the dark.

The client was a passenger on the golf cart as his driver started to return to the boss' house. His driver and the driver of the water wagon saw each other at the last second, with each driver veering from the other. Unfortunately for my client, the back wheels of the water wagon caught him and yanked him under.

The client has incurred more than $400,000 in medical expenses for his injuries from this loss.

Whose policy is primary? The golf course as owner of the water wagon? Or the boss' homeowner policy, which actually would be the golf course owner's policy as the boss' father owns the home? Or the golf course's CGL policy?

As a side note, the driver of the golf cart (the one on which my client was a passenger) rents his apartment and has no renter's insurance. Also, the golf course owner was supposed to have provided my client with health insurance as part of his employment, but failed to add my client to the group policy. Thus, my client has no health insurance. Thoughts?

If you want to apply for the job (or just want to show off what you can do), send your answers to one or more of these questions to me at [email protected]. I'll run our responses and your coverage comments in the next few columns.

Have a happy and great New Year.

Bruce Hillman is editorial director, Professional Publishing Division, of the National Underwriter Co.

The FC&S Claim Queue is prepared and written by the editorial staff of The Fire, Casualty and Surety (FC&S) Bulletins, the most widely used encyclopedic reference service devoted to insurance policy interpretation and coverage topics. FC&S is published by The National Underwriter Company.