Property Damage Issue under CGL Form

Our insured is a rental equipment company. In this particular claim, it rented out an electricity generator that failed to work. As a result, the insured's client was prevented from recording an event that eventually was to be televised, thus allegedly suffering a loss of income. Since insured's client only suffered a loss of income, not damages to his personal property per se (i.e., none of his equipment suffered damages due to the broken-down generator), is the client's claim covered as property damage under our insured's CGL Policy (1996), considering that money is not tangible property?

Puerto Rico Subscriber

Property damage is defined on the CGL form as: physical injury to tangible property, including all resulting loss of use of that property; and loss of use of tangible property that is not physically injured.

As it relates to the situation you describe, what is significant about the definition of property damage is the phrase “tangible property.” For there to be property damage, something must happen to tangible property. As you stated, nothing happened to the client's equipment or any other tangible property as a result of the broken down generator. Therefore, there was no property damage and no covered claim for loss of income under the CGL form.

 

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis