Tenants Liability Endorsement and Damage to Personal Property

September 20, 2011

I received a claim in which the insured leases a building from a landlord. The lease agreement indicates that the insured agrees to keep the premises in good condition and make necessary repairs. The insured has an endorsement, Business Liability Coverage Tenant Liability, BP 04 55, attached to his BOP. The landlord discovered damage to some outside tables and chairs that he owns and the insured uses for his restaurant. Although the tables and chairs are under the care, custody, or control of the insured, will this endorsement cover the damaged property; or only the premises itself? There is no damage to the premises.

Indiana Subscriber

There does seem to be contradictory wording in the endorsement. The endorsement removes the exclusion pertaining to personal property in the care, custody, or control of the insured; this would seem to favor coverage for the damaged tables and chairs. On the other hand, the endorsement speaks of “premises,” which both a standard dictionary and a legal dictionary say refers to real property; this would seem to not favor coverage for the personal property of tables and chairs. Both are reasonable interpretations of the endorsement.

 

Since there is more than one reasonable interpretation of the endorsement, the insured should get the benefit of the doubt. After all, if the insurer did not intend to cover damage to personal property on the covered premises, the endorsement could have been worded in such a manner to accomplish this, and it was not. The insured should have the coverage afforded by the endorsement.

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