We are public adjusters. Our client is a meat company with a commercial property policy. Their smokehouse burned along with two large meat smokers located inside. Because the smokehouse was not described on the declarations, the insurer has denied coverage for the business personal property (the meat smokers) because they were not located in the described premises or in the open within 100 feet of the described premises.

The smokehouse was of masonry block construction on a slab with a door, two windows, a vent, and a roof. It measured twelve feet by twenty feet and about nine feet tall. It stood less than twenty feet from the main processing building. It was attached by continuous concrete sidewalk, and the electricity was provided from the main structure. This smokehouse was twenty to thirty years old and a part of the realty when the insured bought the property five years ago.

The agent inspected the property five years ago, when he initially insured it. After the fire, he told the insured that he didn't know that the smokehouse was there, when it was easily in sight.

It is our belief that this structure is an outdoor fixture and is a direct processing unit of the meat processing plant. We feel that coverage should be afforded for it under the policy, but the insurer has denied the coverage.

So, we have three questions: is the smokehouse an outdoor fixture; if so, is there coverage for this loss under the policy; and, finally, is the agent responsible for overlooking coverage?

Illinois Subscriber

First, as to the agent's responsibility: yes, the agent has a legal responsibility here.

It is hard to imagine this smokehouse as a "fixture." Webster's Collegiate Dictionary (Tenth Edition) defines "fixture" as "something that is fixed or attached (as to a building) as a permanent appendage or as a structural part (as plumbing)." The smokehouse was "attached" to the main building only by means of an electrical wire. This would hardly seem to meet the requirement of permanency.

Since the smokehouse was not described on the schedule, there is no coverage for it. Since the business personal property (the smokers) was not located in a covered building (or in the open within 100 feet of a covered building), there is no coverage for those items, either.

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