Theft or Conversion Exclusion under GKLL Coverage

September 12, 2012

Our Virginia insured has a garage policy form CA 00 05 03 06. A customer's vehicle is in the insured shop for repairs, which were completed. A technician at the insured's shop decided to use the customer's vehicle on his lunch break instead of his own because the customer's vehicle had air conditioning and his did not. The named insured was unaware that the technician had taken the vehicle. The customer came to pick up the vehicle and the insured then discovered that the keys were missing from the sealed envelope. Shortly thereafter, the insured received a call indicating that the vehicle was involved in an accident. The customer arrived at the scene and informed the police that the technician did not have authorization to use her vehicle and the police charged the technician with unauthorized use of a motor vehicle. The policy has symbol 30 for GKLL collision and symbols 27 and 28 for liability. Our question is whether the theft exclusion, which includes conversion under the GKLL coverage would apply given that that the vehicle was allegedly stolen by an employee of the insured. In addition, would there be liability coverage given the symbols and the fact that the technician did not have permission to use the customer's vehicle for personal use?