An agency insures a garage operation that leases its premises. A carrier is quoting the client on a package that offers property and garage liability, but no fire damage legal liability.
Q: "Most carriers write the exposure on a package or BOP to include the property, general liability and garage liability (garagekeepers, etc.), but this is going back to the old days. Is there a way other than writing improvement and betterments to cover the damage by fire exposure for this garage operation as a tenant? Does an ISO form accomplish this?"
A: “Tenants improvements and betterments is not a coverage that addresses this exposure. The Big ‘I’ Virtual University (VU) offers at least three articles you should find helpful in determining the proper course of action to insure the leased premises exposure:
Most leases today make the tenant responsible for more than fire damage. In fact, many make the tenant responsible for any damage beyond normal wear and tear, even damage in which the tenant has no liability outside that created by the contract itself (something excluded by the CP 00 40 mentioned in the articles above).
The only practical way to come close to compliance with lease requirements for insurance and Damage & Destruction clauses is with direct property coverage under the ISO CP 00 10, a BOP policy or a company equivalent to these forms.”
Bill Wilson is director of the Big “I” Virtual University.
This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email logon@iiaba.net to request login information.
