The article of the month deals with punitive damages. Dependent on the jurisdiction, there are three positions that have been adopted regarding whether or not an insured can collect under a general liability policy for punitive damages awarded against him. In some states, punitive damages are flatly not insurable as a matter of public policy. In others, courts have held that the language of the insurance contract controls and, absent an exclusion of punitive damage awards, they are insurable. The third position is that punitive damage awards vicariously assessed an insured are insurable.

This article of the month discusses these positions and offers more information on the insurability of punitive damages.

The court cases cited in the Dec Page come from Vermont, California, and U.S. District Courts. The Vermont Supreme Court dealt with the duties of the insurer after a loss. The insured sued the insurer, alleging that the insurer had an independent duty to handle her claim in a reasonable manner and violated that duty by negligently inspecting and processing her claim. In a case from the Western District of Tennessee, the U.S. District Court ruled on the question of who is an insured under a personal auto policy. Was the insured's boyfriend a permissive driver when he took the insured's car and caused an accident? The Court of Appeal in the Second District of California reviewed a case where the question pertained to a mobile equipment versus automobile issue. The question involved a food truck and whether the injuries arising from the use of that food truck were covered by the auto policy or the general liability policy. The final case comes from the Western District of Tennessee, and the issue involves the mobile equipment versus automobile question again. The insured and the insurer intended to have the truck and attached tree spade covered under the auto policy, but the injured party claimed both the auto policy and the general liability policy applied to her claim because the truck and attached tree spade could be seen as mobile equipment and as an auto.

Questions and Answers

When a car is damaged going through a car wash, should the damage claim be covered under the garagekeepers coverage or the garage operations liability coverage? See GKLL Coverage or Garage Operations Liability Coverage. If the insured pays rent to use a common area that is used by other occupants of the building, and causes damage to that common area, is this property the insured leases, rents, or occupies, with the damage to property you own exclusion applicable? See Damage to Property You Own Exclusion.

What is the purpose of endorsement CG 22 60, limitation of coverage—real estate operations? See Real Estate Operations Endorsement. Does the damage to your work exclusion apply when wind blew an extension pole belonging to the insured window washer through the customer's window? See Damage to Your Work Exclusion under the BOP. If the insured was holding a chandelier out of his way while painting a room and the chandelier broke off and shattered to the floor, does the care, custody, or control exclusion apply? See Care, Custody, or Control Exclusion under Review.

Accounts Receivable

Accounts receivable insurance, provided under inland marine forms and rules of the commercial lines program of Insurance Services Office (ISO), is actually a kind of consequential coverage. The risk insured by this coverage is loss resulting from the insured's inability to collect amounts due from customers due to loss or damage to the insured's records. Interest charges on loans required to offset amounts that the insured is unable to collect pending the insurer's payment of a loss, collection expenses in excess of the insured's normal collection expenses that are made necessary by the loss, and other reasonable expenses incurred by the insured to reestablish lost records of accounts receivable are also covered. The article has been updated with the most recent edition of the ISO form. See Accounts Receivable.

Commercial Crime Coverage Form

The commercial crime policy has been updated in 2013. The policy is designed to provide coverage from only certain types of crime; employee theft, forgery, and some computer crime. Computer coverage is important to pay attention to, as the policy is not designed to provide coverage for various types of computer theft. The article has been updated with the most recent edition of the ISO form. See Commercial Crime Coverage form.

Improvements, Alterations, and Additions

Improvements are often made to condominiums and other dwellings where the insured owns part of, but not all, of the structure. Tenants may also make improvements to the property they rent. Various policies cover these additions. The article has been updated with the most recent edition of the ISO form. See Improvements, Alterations, and Additions.