June 27, 2016

Our policy holder is a cleaning company. An employee put a vacuum on the couch standing up, and turned it on, and then used the hose attachment from the vacuum to clean a different section of the couch. While the employee was cleaning a different section of the couch with the hose, the vacuum bristles were spinning and damaging the section of the couch that it was standing up on. Does the exclusion in the liability policy pertaining to property damage that has to be repaired because the insured's work was incorrectly performed on it apply?

Iowa Subscriber

That exclusion will not apply since it refers to property damage to that particular part of property that has to be repaired because the work was incorrectly performed on it. The employee was not actually performing work on the section of the couch when it was damaged. So, the exclusion, being read strictly, would not apply.

How about the care, custody or control exclusion? The problem here is that the exclusion is particular to “the” insured and an employee is not an insured for property damage to property in the care of or over which physical control is being exercised for any purpose by an employee. Since the named insured is not the employee, the exclusion would not apply to the named insured either.

So, this may be a case where the details of the incident cause it to fall into the cracks between exclusions. It is a case of the employee's work damaging another's property and this is the purpose of the liability coverage.

This is presuming that the damage occurred before the employee was finished with the work and so, the damage to your work exclusion would not apply since that is only for completed operations claims.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis