A

As you have surmised, the category of “property not covered” relating to rented property excludes coverage for property owned by the insured and held for rental or rented to others. It does not apply in this case.

We do not think, however, that because this exclusion does not apply, coverage C applies to this loss. The policy covers “personal” property owned or used by an insured, and we would argue that the rented chairs and tables are not personal property. (“Personal,” according to Webster's Collegiate Dictionary, means “of, relating to, or affecting a person: private.”)  Rather, they are the property of a business, and, as such, we believe they fall outside this coverage. A business that rents property to the public charges a fee, and built into that charge is (or should be) part of the cost of insuring that property.

Where some coverage may be found, though, is in the section II additional coverage for damage to property of others “caused by” an insured. The policy does not state that an insured must directly cause the damage; rather, by neglecting to take reasonable care of the property an insured could indirectly cause damage to it. Other than this additional coverage, there is no liability coverage for property rented to or used by the insured, unless the damage is caused by fire, smoke, or explosion.

This additional coverage is limited to $500 in the 1991 ISO homeowners, and $1,000 in the ISO 2000 forms.