We insure a performing arts building that is owned by a nonprofit foundation, but the land on which it is situated is leased from the city. On the premises in a separate structure from the insured building is a vault containing all of the electric wires that service the insured's building. A fire in this vault knocked out power to the performing arts building just when a major performance was scheduled.

We have off premises services—time element power failure coverage (CP 15 45 04 02), but it presents two problems. There is a sixty hour deductible, and the damage actually occurred on premises, although the damaged wiring was in a structure owned by the city and not insured by our client.

We have argued that the damaged wire, even though it was located in the city owned vault, was owned by the insured because it ran directly into the insured's building and thus constituted a loss that triggered the business income coverage. The insurer claims that the wire is owned by the utility company and is therefore not insured property, thus precluding business income coverage.