However, the second exclusion listed (Excl 3.b) seems more appropriate.

— Virginia Subscriber

Answer: According to the exclusion for Governmental Action, the only loss that would be covered is ensuing fire. Otherwise the exclusion would preclude coverage for the damaged windows and doors.

Even though the team was acting legally, the SWAT team is a government authority. As such, their actions in damaging the property are excluded.

Consider the following case, which was closely related to your question:

In Alton v. Manufacturers and Merchants Mutual Insurance Co., 624 N.E.2d 545 (Mass. 1993), police executed various warrants to search a building for cocaine, drug paraphernalia, records of drug transactions, and money. In carrying out the search, the building was damaged. The insured submitted the loss to his insurer, which denied the claim. The court upheld the denial, stating that the damage was caused by the police in executing the search warrant, and the search necessarily entailed a certain amount of destruction.

As an aside, depending on the facts of the situation, the insured may wish to contact the authorities and ask if they will cover the damages.

See also: 5 strategies to reduce property vandalism

Police work leads to damaged property

Question: The insured is a health clinic covered under the commercial property open perils form. Recently, a man who was trying to evade capture by the police ran into the clinic and proceeded to take hostages.

Eventually, he was forced to surrender by the police, who used tear gas and gunfire. In the process of capturing the fugitive, damage was done to both the building and personal property of the health clinic.

The insurance company is denying coverage under exclusion B.1.c. of the CP 10 30 form. This exclusion avoids coverage for loss or damage caused directly or indirectly by “seizure or destruction of property by order of governmental authority.” We are unsure about the company's interpretation of this exclusion.

— California Subscriber

Answer: The exclusion of loss caused by order of governmental authority is not so broad as to exclude this type of loss. The aim is to exclude coverage for the intentional destruction of property by governmental authority because of some hazard that the property presents, such as when the government orders the destruction of vegetables that are infected with the Mediterranean fruit fly.

In the case you present, the destruction done by the police was incidental to the capture of the fugitive. Bullets that damaged equipment were intended to control the fugitive; they were not fired because the equipment posed any danger to people or property.

One would not expect the police officer in charge to state that he or she ordered the destruction of property. For these reasons, the insured has coverage under the policy. A New Jersey court has held, however, that damage done to an apartment by the police in conducting a search warrant was properly excluded under the governmental authority exclusion.

Related: 6 parking lot perils property owners need to pay attention to

Lost doors and windows during police action

Question: We have a named peril (form 2) policy on a tenant-occupied structure. The tenant was involved in a standoff with police and eventually shot himself. The police broke doors and windows and shot tear gas into the dwelling. We do not see where the damage by police is covered, since it was not willful malicious damage to harm the insured or the insured's property. The damage by the tenant shooting himself would be covered as explosion.

— Pennsylvania Subscriber

Related: 3 risks to consider if you own rental property

Answer: You are correct, there is no named peril that applies to the actions of the police. Yes, explosion does apply to the gunshot, and any repair or cleanup from that is covered.

There is no named peril that applies to police actions but repair and cleanup from a gunshot may be covered. (Photo: iStock)

Homeowner's fire department service charge

Question: We have a question about homeowners coverage for a fire department service charge. Our insureds live in rural and semi-rural areas. Town fire departments often have contracts with smaller towns, villages, or townships to provide service. We are concerned about the provision in the additional coverage that ties payment for fire department service charges to the insured's liability assumed “by contract or agreement.” In most cases, the only contract is between the local governments, and not between the individual homeowner and a government entity. Is the insured covered in this instance?

— Vermont Subscriber

Related: Understanding how property is valued after a fire

Answer: Yes, the insured has coverage under such circumstances so long as the property is not located within the limits of the city or municipality that furnishes the service. No formal contract is required for coverage, since an “agreement” will suffice. According to Webster's Ninth New Collegiate Dictionary, an “agreement” is: an arrangement as to a course of action. Simply by living in his town, the insured has made an agreement to abide by the local ordinances, regulations and arrangements for payment of services.

The insurance policy does not specify who the parties to the agreement must be. If all residents of a particular town must pay for services passed down to them or services provided by an out-of-town fire department, coverage applies.

Related: 6 critical home fire escape planning tips

When patients come before property damage

Question: We have an agency customer on an HO3 policy. He had suffered a medical condition and called 9-1-1 for emergency treatment. Upon arriving, the paramedics received no answer to the front door bell, nor any answer by phone. So, to gain access to the home to treat our client, paramedics attempted to break down the front door. The door was damaged but they still could not gain entry. They proceeded to break down the back door, which is how they gained access and then treated their patient/our client.

The damage is well over the insured's deductible. Is this a covered cause of loss?

— Ohio Subscriber

Related: Insuring the risks of private medical transport services

Answer: Indeed, this is a covered loss. There is no exclusion for emergency medical assistance breaking in the door to rescue the insured. While the EMTs may work for the government, this action is not the same as a governmental action in which property is destroyed by order of any public authority; that particular exclusion won't apply in this instance. The exclusion for acts or decisions of governmental bodies also doesn't apply. The insured required emergency medical treatment, and received it. The damage to the doors was an unfortunate side effect, but is still covered.

Are police fees covered by personal auto policies?

Question: I am writing to ask your opinion regarding whether the personal auto policy provides coverage/payment for charges levied by local police departments arising from their officers responding to a vehicle accident. As you may be aware, some local departments are sending invoices to at fault drivers to cover the, “costs,” of having the officers respond. I realize the insuring agreement promises to pay damages for “bodily injury” or “property damage” for which any “insured” becomes legally responsible because of an auto accident. However, I can't find anywhere in the policy that addresses this type of expense.

— Pennsylvania Subscriber

Answer: You are indeed correct, the ISO PP 00 01 policy covers bodily injury or property damage for which the insured becomes liable. Fees levied by local police departments for responding to the incident are neither. The supplementary payments section of the policy, which is where such coverage could exist, only provides for judgments, bail bonds, interest after a judgment, or expenses incurred at the request of the carrier. There is no coverage in the standard personal auto policy for fees for police response.

Related: 7 steps to paying the right amount for bodily injury claims

Should tear gas be considered a pollutant?

Question: Our insured owns and operates a gun shop. During late evening hours, while the shop was closed for business, unidentified persons broke into the store and stole several items. They activated the silent alarm, which brought the police department to the scene.

The police believed the suspects were still inside the premises when they arrived. They decided to shoot tear gas into the building, with the hopes the perpetrators would surrender and exit. It was later determined that the suspects had fled the scene before the police arrived.

The insured has subsequently filed claim for:

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            1. Break-in damage to the building;
            2. Theft of stock;
            3. Cleaning of interior areas of the building affected by the tear gas; and
            4. Cleaning and replacement of clothing and other porous business property damaged by the tear gas.

The insured has a CP 10 30 Special Causes of Loss form.

We all feel comfortable providing coverage for the building damage attributed to the break-in and the theft of business property. Our question centers around the available coverage for cleaning the structure and replacing damaged business property attributed to the tear gas.

Some in the office feel the tear gas is a pollutant, where coverage is limited under the form because theft isn't a “specified cause of loss” as defined. Others believe there is an uninterrupted chain of events leading from the break-in to the police department's actions, and all damages as a result should be considered within the scope of the theft claim without limitation.

Does the tear gas fit the definition of a “pollutant” as defined in the policy forms? Should we exclude coverage for the work related to the clean-up as a result of the tear gas discharge?

— New Jersey Subscriber

See also: Where there's smoke, is there a pollutant—and an exclusion

Answer: This part of your office is correct: “Some in the office feel the tear gas is a pollutant, where coverage is limited under the form because theft isn't a 'specified cause of loss' as defined.” Tear gas would indeed be considered a pollutant and damaged caused by it would not be covered.

The definition of personal injury does include wrongful eviction but it has to be from a room, dwelling, or premises that a person occupies. (Photo: iStock)

Negotiating the aftermath of a wrongful eviction

Question: Our insured has been named in a complaint alleging that they “personally or through their employees encouraged and actively participated in the intentional ejecting, harassment, and threatening of the plaintiffs.” Additionally, the complaint seeks judgment against the insured to compensate for losses suffered and injuries inflicted as a result of the insured's wrongful conduct; the injuries claimed are battery, emotional distress, humiliation, and embarrassment.

The insurer is refusing to provide a defense or indemnification on the basis that the complaint against the insured does not trigger coverage and that the conduct of the insured was intentional and criminal.

We disagree because coverage B of the CGL form covers intentional acts and we think the definition of personal injury includes wrongful eviction; the insured had the plaintiffs evicted from his business by the police. What do you think?

— Connecticut Subscriber

Answer: It is true that Coverage B of the CGL form applies to intentional acts or offenses as opposed to occurrences or accidents. However, Coverage B applies to personal injury, which is a defined term, and unless the definition of personal injury is met as it appears in the CGL form, the form does not apply.

The definition of personal injury does include wrongful eviction but it has to be from a room, dwelling, or premises that a person occupies, and the eviction has to be by the owner or landlord of those places. Based on your description of the event, the eviction was from the insured's business premises and so, the person(s) evicted did not occupy that premises. Also, the eviction has to be a wrongful eviction and if the police did the actual evicting, the presumption is there that the eviction was not a wrongful one. Therefore, the definition of personal injury is not met in this case and the insurer is correct in its assessment.

You did not ask about the claim for injuries based on the insured's wrongful conduct; that is battery, emotional distress, humiliation, and embarrassment. The claim for battery would fall under Coverage A (bodily injury and property damage), except for the fact that this coverage applies to occurrences or accidents, and the actions of the insured do not seem to be accidental in this incident.

Are auto accident clean-up expenses covered?

Question: It is my understanding that the expenses incurred by a fire department to clean up hazardous substances in the roadway, caused by an auto accident should be covered under the personal auto policy. However, we are reviewing a complaint where the carrier is stating that the town that had its fire department perform the clean-up did not sustain bodily injury or property damage and so, the insurer is denying the claim. I would greatly appreciate your insight.

— Vermont Suscriber

Answer: The only way that a clean-up expense would be paid under the PAP is if the insurer considers it to be property damage as defined. Some insurers may go along with this and others may not. We are of the opinion that clean-up expenses in and of themselves may not fit the definition of property damage, although much depends on the facts of the particular incident. For example, if the hazardous substance leak actually causes the roadway to buckle and become unusable to the point that it has to be repaired, we see that as property damage as defined, and the repair and the clean-up as part of the repair would be covered. However, if a spill just requires a clean-up and there is no actual physical damage, that is not property damage as defined. Therefore, you have to see exactly what the circumstances are before deciding to cover or not cover a claim.

See also: Death and the insurance questions regarding human remains

What about firefighting expenses?

Question: Is the CGL form not meant to pay expenses to fight a fire for which the insured is negligent? For example, the insured hot tars a roof and the building burns down. Cost to replace the building is $1,000,000 and the expenses to put out the fire come up to $20,000, so the total bill is $1,020,000. Does the CGL form only pay for the property damage portion ($1,000,000) and not the expenses to put out the fire?

My thought would be that the CGL form would pay the expenses as well as the actual building damage amount as the firefighting expenses are directly attributable to property damage (burning of forest or burning of building). What is your opinion?

Also, we have a personal auto policy written on an ISO form. We have no comprehensive or collision coverage. Our insured struck a utility pole and was treated and released at the emergency room. Someone called 911 and the fire department responded to the scene, “and assisted the county sheriff with scene measurements and remained on the scene until the vehicle was removed”. There is no damage to the pole, thus no liability claim is being presented. Is there coverage afforded for the fire department charge submitted?

— Iowa Subscriber

Answer: What the CGL form will pay for is property damage for which the insured is liable. However, there has to be property damage as defined. Property damage is physical injury to tangible property or loss of use of property that is not physically injured. As long as there is property damage as defined, the policy will pay all expenses that the insured is liable for and if that includes firefighting expenses, then that is going to be covered. However, if there is no property damage as defined, consequential expenditures like firefighting are not going to be covered by the CGL form. Therefore, the key is the occurrence of property damage as defined in the form.

The coverage under the PAP liability section is for property damage as defined. The definition is physical injury to, destruction of, or loss of use of tangible property. Fire department expenses that do not fit this definition do not equal property damage. Besides, if there is no liability claim against the insured, the PAP liability insuring agreement will not be invoked, so there would be no coverage for the fire department expenses in this instance.

Police confiscated computer

Question: An employee stole money from our insured. The employee admitted to taking money from members' accounts. The police confiscated her work computer hard drive, which had to be replaced, and the data from the confiscated hard drive had to be copied to the new hard drive. Would these costs be covered?

— Wisconsin Subscriber

Answer: This type of situation would not be covered. The crime and property forms generally carry governmental action exclusions, which exclude seizure by government entities. In order for the data duplication costs to be covered, the data must have been lost or damaged by a covered cause of loss, and the governmental seizure would not be covered.

See also:

Auto claims face a bumpy road ahead

Here's why some fire damage claims go up in smoke

How to accurately calculate repair, replacement costs