Can a  landlord's furnishings intended to remain in individual units be covered under building property (whether owned or leased) if requested by the named insured? He owns an apartment complex insured under a Commercial Property Policy, CP 00 10. Certainly, landlord's furnishings are there to "maintain or service" this residential exposure. The business is essentially providing a place to live and providing furniture is clearly part of this business.

My understanding is that a broad interpretation of what constitutes personal property is to be given when determining if personal property used in the business can also be covered under building property. I feel that ISO could increase the understanding of their policies by having a few more examples of building property. Also, I don't understand why in the definition of building property ISO uses the term "personal property" while having a separate definition for "business personal property." Are these two different classes of property?  Why didn't they just say business personal property in the definition of "building"?

Florida Subscriber

The landlord's furnishings would not be covered under building coverage. While the examples given under "personal property…used to maintain or service the building" might be a little confusing, the furniture you described is used to service the insured's business but not the building. Therein lies the distinction between personal property and business personal property.

The fact that "outdoor furniture" is specifically listed under building coverage, and "furniture" is specifically listed under business personal property coverage points to the intent that furniture, other than outdoor furniture, should not be considered "building."

At least one court has also categorized furniture as business personal property, and damage to the furniture was not covered under building coverage. (See Prytania Park Hotel v. General Star Indemnity Co., 179 F.3d 169 (5th Cir. 1999)).

Although a standard adjuster response would be to deny damage to landlord's furniture under building coverage, some FC&S editors state that an argument might be made that some of the items given as examples of personal property used to maintain or service the building are not necessarily used for that purpose. Notably, appliances used for refrigerating, ventilating, cooking, dishwashing, or laundering could be used to service only one tenant. However, the distinction would be a question of fact that is beyond the scope of the FC&S.

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