Care, Custody, Control Exclusion — How Applied under CGL Form?

An employee of a cleaning company that we insure broke a table while cleaning the office of a client. I denied the claim because of the care, custody, and control exclusion on the current ISO CGL policy. However, someone else in my office believes it should be covered. Who is right?

Maryland Subscriber

There should be coverage for the cleaning company but not for the individual employee — if he were sued — for the damage under the current version of the ISO CGL form. Under the “Who Is An Insured” section of the form, an employee is not an insured for property damage to property “in the care, custody or control of, or over which physical control is being exercised for any purpose by” the named insured or any employee. The employee is not an insured at all for a loss that involves property damage to property in his care, custody, or control.

Coverage for the employer probably is not excluded because he actually did not have control over the property that was damaged. You can find in-depth discussions of this exclusion and how the courts have interpreted it in various discussions in The FC&S Bulletins.

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