(2) it is being shifted by the insured's employee using a tractor unit after it has been unloaded, since the truck driver is often absent because he has gone to a restaurant for a break (the underwriter has advised that there is no coverage).

We thought that there was coverage for the situation in the second example under the exception to exclusion “g” (excluding bodily injury or property damage arising from the ownership, maintenance, use, or entrustment to others of any auto owned, operated, or rented by an insured). This exception says that the exclusion does not apply to parking a nonowned auto on or on the ways next to premises the insured owns or rents.

South Carolina Subscriber

The insurer has correctly invoked the “care, custody, or control” exclusion in denying the existing claim. As for the other two scenarios that you presented, the answer to any possible coverage depends on the extent of the insured's “care, custody, or control” of the trailer.

In the first scenario where the insured is unloading the trailer, presumably the driver of the trailer still has control of the trailer in that he is in the trailer or at least has the keys. If that is the case, the insured does not have the trailer in his care, custody, or control and the exclusion does not apply. The insured does need to pay attention to exclusion “g” in this case since the exclusion applies to the loading or unloading of an auto. Here, the definition of “loading or unloading” takes center stage; if the insured uses a forklift to unload the trailer, that does not fit into the definition of “loading or unloading” as found in the CGL form. Therefore, exclusion “g” will not come into play and the insured would have coverage if the trailer was damaged, for example, by an employee of the insured running the forklift into the side of the trailer. So, the carrier was correct in its advice as long as the driver keeps control of the trailer and the insured unloads the trailer using a forklift or some other mechanical device that is not attached to the trailer.

Under the second scenario, there is no property damage coverage, but this is based on the care, custody, or control exclusion; exclusion “g” has nothing to do with the property damage question. When the insured's employee moves the trailer, he has custody and control of the vehicle; any property damage that occurs to the trailer while the employee is moving it is excluded. Now, the parking exception to exclusion “g” does reinstate coverage for third-party bodily injury or property damage when a nonowned auto is being parked on the insured's premises; but this exception does not negate the effect of exclusion “j(4)” on property damage. What an exception giveth, an exclusion taketh away; the care, custody, or control exclusion takes away any coverage for property damage to the trailer.