The insured is a package/shipping store. The store was hired to ship two items via UPS. The insured packaged the items and then shipped the items by UPS. Apparently, the items were damaged during the shipping process and a claim was made against the insured. The question is whether any exclusions on the CGL form would apply. Exclusion 2l, damage to your work, might apply since the insured's work was to package and ship the items; the claim is that the insured did not do this properly and that is what caused the damage. Or, is exclusion 2.j.(4), the care, custody, or control exclusion applicable?

What is your opinion?

Pennsylvania Subscriber

Exclusion j(4) is not applicable. That is the care, custody, or control exclusion, and the damage to the shipped items did not occur while the insured had the care or custody or control of them. The items were damaged while in the custody of UPS so the insured may want to check on the possibility of liability on the part of UPS.

However, if the insured is held to be liable for the damage, exclusion 2.l. is not going to apply to prevent coverage. That exclusion is very poorly worded and difficult to understand, but the bottom line is that the exclusion applies to damage to the named insured's work and not to damage to another's property that is due to the named insured's work. In this instance, the named insured's negligent work allegedly caused damage to another's property and if so, that damage is meant to be covered by the general liability policy. If the insured had negligently packaged the items and the packaging itself fell apart and the insured had to redo the packaging, that is something that the CGL form would not cover. But, if the negligent packaging (the negligent work of the insured) did cause the damage, the claim arising for that damage is covered by the CGL form.

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