We recently had a claim where our insured was towing a stock trailer with his pickup truck and had an accident. The stock trailer jack-knifed and rolled into a ditch after coming loose from the pickup. Three calves escaped unharmed from the rolled trailer and ran into a nearby cornfield. This accident happened thirty miles from the insured's farm and it took the insured three weeks and several trips to retrieve the calves.
The auto insurer paid for the damaged trailer and for the property damage to the surrounding cornfields where the escaped calves wandered and fed. Our insured also submitted a bill for labor costs to retrieve the calves, but the auto insurer denied coverage. We think that the retrieval should be paid by the auto insurer because the insuring agreement states that the insurer “will pay damages for BI or PD for which any insured becomes legally responsible because of an auto accident.” We think the labor for retrieving the animals and preventing further property damage to be part of this broad agreement. What do you think?
Iowa Subscriber
We do not believe that the PAP would pay for the cost to retrieve the calves. You are right that the liability insuring agreement of the auto policy is quite broad. If the insured is held liable for property damage because of this accident, there would be coverage unless an applicable exclusion prevents the coverage. But are retrieval labor costs property damage? Such costs do not fit the definition of property damage—that is, physical injury to or loss of use of tangible property. Of course, those costs might be seen as justifiable expenses made to prevent future PD losses, but the liability coverage under the PAP applies to property damage that has already happened, not for speculative PD that may or may not occur in the future.
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