Damage to Property Exclusion Applicable to Loss?

Our insured was hired to lay carpet in a customer's home. As the insured and his two employees were carrying the carpet into the home, the carpet scratched the ceiling, the trim, and various pieces of furniture. Based on the CGL form, I would say that the ceiling and furniture damage is covered, but the damage to the baseboard trim would not be. I think the baseboard is related to the laying of the carpet and so, is the insured's work and is excluded from coverage. What is your opinion?

Kansas Subscriber

The damage done by the insured was done while he was carrying on his work, while he was performing his operations. So, the damage to the named insured's work exclusion is not applicable because that is for a completed operations exposure. Since the insured caused property damage while he was performing operations, the exclusion on the CGL form to examine is j.5. This exclusion applies to property damage to that particular part of real property on which the insured is performing operations if the property damage arises out of those operations.

The exclusion will not apply in this instance because the insured was not performing his operations on the ceiling or the trim when the damage was done. The insured was preparing for his work by carrying carpet into the home; he was not working on the damaged areas at the time of damage so the property damage did not arise out of those operations. If the damage to the trim had been done while the insured was actually laying the carpet, the exclusion might apply but even that is stretching the reach of the exclusion. Simply being "related" to the work of the insured—that is, being in close proximity to the work—is not the same as actually being the work. As for the furniture, that is personal property, not real property, so the exclusion does not apply to the furniture at all.

The CGL form would provide coverage for the damage done by the insured in this claim.

 

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