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Modern technology and outages complicate the relatively simple process of determining coverage of buildings and personal property.

By Susan Massmann | Updated on July 27, 2012
It is usually fairly simple to divide buildings and personal property into two separate categories for insurance purposes: covered property and property not covered. Most forms provide a list of the property that is not covered. A commercial property or homeowners’ policy is probably going to cover the building or dwelling and personal property. Land and lawns will most likely fall in the “not covered” category.

So where do unauthorized satellite transmissions fall? Or how about electricity? Or, as some FC&S subscribers have inquired, phone time? Recently, an FC&S subscriber described his client’s phone woes: 

We have a client who suffered a lightning strike, which disabled the phone system. While the firewall was down, an outside party hacked into the system and used it to place a large number of metered, per-minute international long distance calls to the tune of $25,000.The client is insured under a Businessowners policy with an endorsement that provides up to $5,000 for computer fraud. The carrier has denied the claim for the phone charges on the basis the charges  are not “covered property.”   

The computer fraud coverage states that the insurer “will pay up to $5,000 in any one occurrence for physical loss of or physical damage to ‘money’, ‘securities’, and other property having intrinsic value resulting directly from computer fraud. Computer fraud means any act of stealing property following and directly related to the use of any computer to fraudulently cause a transfer of that property from inside your premises or from a banking institution or similar safe depository, to a person (other than a ‘messenger’) outside those premises or to a place outside those premises.”

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