Will you give us an opinion on this claim and the adjuster's denial?

Oklahoma Subscriber

A

We read the letter from the insurer that you sent and we do not agree with the adjuster's interpretation of the coverage form.

The coverage that the insured has is classified so that the products-completed operations hazard is subject to the general aggregate limit. This does not mean that the insured has no completed operations coverage. The denial letter of the adjuster was a bit confusing, but it seemed to say that just because of the classification the insured cannot have a completed operations loss. This is not the meaning of the classification. The insured has products-completed operations coverage under the CGL form unless there is an applicable exclusion. The classification simply means that any covered loss will be paid under the general aggregate limit and not a separate products-completed operations limit. We believe that the adjuster is confusing coverage with the applicable limit of liability.

As for the exclusions, j. is not applicable at all. Exclusion j. is for ongoing operations, not completed operations, exposures. Most courts hold that property damage occurs when it manifests itself or the claimant notices it. In this case, the wheat died several days after the application and that is when the property damage occurred; in other words, a completed operations loss. Exclusion j.(4) is not applicable because wheat growing in a field is real property and even if not, it was not in the insured's care, custody, or control when the property damage occurred. Exclusions j.(5) and j.(6) are not applicable because the property damage occurred after the operations were completed, and these exclusions are used only for ongoing operations.

The only possible applicable exclusion under the CGL form would be (l) since that applies to completed operations. But that doesn't apply either because the damage was to the customer's property, the wheat, and not to the insured's work. The exclusion is poorly worded and causes much confusion, but the bottom line is that damage to a customer's property is covered. The exclusion is only meant to apply to damage to the work of the insured itself. In this case, the insured's work damaged another's property and that is meant to be covered by the CGL form. If there were no coverage for the spraying and that is the profession of the insured, why even have a liability policy?

This is a completed operations loss. There is no applicable exclusion to prevent coverage.