| Author |
Message |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 299
Registered: 6-2001
| | Posted on Tuesday, May 14, 2002 - 8:13 am: | |
Ok, let's go back and finish this coverage question up so our 'poor' old friend John Durham can get the maximum insurance settlement check for which he is due.
Mark basically had the correct answer with the exception of not covering the pollution clean up exposure.
Let's take a look at the CP 00 10 (06 95) and what it has to say about Pollutant Clean Up and Removal:
We will pay your expense to extract "pollutants" from land or water at the described premises if the discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused by or results from a Covered Cause of Loss that occurs during the policy period.
The most we will pay under this Additional Coverage for each described premises is $10,000.00 for the sum of all covered expenses arising out of Covered Causes of Loss occurring during each separate 12 month period during the policy.
The BOP forms contain similar if not identical language.
The assumption I made and wanted others to pick up on, was that the initial seepage of the hazardous chemicals would not be covered for clean up as the initial seepage was not caused by a Covered Cause of Loss.
However, once a fire started, and an explosion ensued, any further pollutant contamination would be covered, as explosion is a covered cause of loss. My assumption was that the greater amount of pollutant release occurred after the explosion, and the clean up costs were in excess of the $10,000.00 pollutant clean up sublimit in the CP and BOP forms.
There was no bailee policy in effect, but even if there were, there was no bailee relationship created.
Nor was the personal property of the tenants under the care, custody or control of the insured or mini-warehouse.
Automobile exposures and loss would be attributed back to the automobile policy of the auto owner.
Medical coverages are not available under the commercial property forms.
Joe is correct that there is "built-in" business income and extra expense coverage under the BOP forms but business income and extra expense coverage is not automatic under the CP forms, but must instead be endorsed by attachment of the Business Income And Extra Expense Coverage Form (CP 00 30).
(Message edited by jimflynt on May 14, 2002) |
Tom Joyce
Member
Username: Tjoyce
Post Number: 8
Registered: 12-2001
| | Posted on Tuesday, April 30, 2002 - 9:07 pm: | |
OK adjusters, let's gang up on Jim F.
We have a CP policy. Unfortunate that we do not have all the endorsements which could affect the outcome of the claim settlement (ha).
But in the meantime let us assume (hate that word in insurance discussions) that the insured has a standard contract of storage which would basically address the fact of an exchange of money for storage space. Does anyone out there know what is the degree of responsibility between the two parties?
Where is the liability when the "event" occured. In the event that no action by our insured caused the leak, and building was secure at time of the event, does anybody see any liability?
Not having the policy information with me (although after working in Houston for the last few months I do believe all policies were thrown out the window), we have to assume (there is that word again), that we would pay the insured property damages based on policy compliance (such as R/C bus int etc.)
Duties to other tenants??? Care Custody and Control issue and limits of coverage if any. Does anyone care to comment.
How would the liability be directed to our insured and make him/her responsible for personal injuries or incurred extra expences.
Just some thoughts as I do believe the CP0010 and the CP0101 would answer this for you after a quick review.
Would go into additional detail but my ex got all my policies in the divorce settlement.
Tomj |
John Durham
Member
Username: Johnd
Post Number: 66
Registered: 9-2000
| | Posted on Tuesday, April 30, 2002 - 7:45 pm: | |
Jim:
Your question is hard to answer only because of my knowledge of adjusting. Trying to put myself into the "thought process" of the insured is something I have always tried to do... but not the way this scenario has been played out.
If I had two different adjusters give me two different answers, I would not have any faith in either of them and would INSTANTLY seek competent help in settlement of this claim. As you previously stated, I would be calling Bill Cook post-haste.
While I agree with Tom Joyce, whom I respect, this is a claim I WOULD NOT EVEN TAKE as an adjuster because I LACK THE KNOWLEDGE to handle the claim with fairness and finality for the insured and the carrier alike.
Thanks Jim, for making a bunch of us use our noodle to try and learn more about this business.
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 275
Registered: 6-2001
| | Posted on Tuesday, April 30, 2002 - 7:23 pm: | |
Ok John, before the night is over, I promise you'll have your answer.
But first, let me ask you this: John, suppose you had been the real insured in a situation like this or may the rest of you try and put yourself in an insured's shoes for such a claim:
John, what kind of adjuster would you want to handle a claim like this?
John, can you see that the adjuster's generosity is not enough to insure that you receive all of the contract benefits you are due?
John, honestly now, what would you have done in real life, if two different claims adjusters had come out to handle your loss, and you later discovered that neither had paid you for all of the items for which you were legally due?
Can anyone see where not knowing the insurance policy can/could lead to an E & O exposure for the adjuster?
I'll be back later with the correct answers for the scenario presented, just in case one of the PROS out there wants one last stab at showing their smarts.
(Message edited by jimflynt on April 30, 2002)
(Message edited by jimflynt on April 30, 2002) |
John Durham
Member
Username: Johnd
Post Number: 65
Registered: 9-2000
| | Posted on Tuesday, April 30, 2002 - 7:08 pm: | |
HELP ... I need my settlement check! |
Tom Joyce
Member
Username: Tjoyce
Post Number: 7
Registered: 12-2001
| | Posted on Tuesday, April 30, 2002 - 12:25 pm: | |
Jim F. gave you a realistic if not common claim that a catadjuster seldom runs across.
The purpose (in his own way) is to try to get you'all off the hail and wind mentality and read policies to expand your options in the future.
I honestly could not address all the varibles put forth by Jim without a policy in hand, espically with coverage being a CP which is a different animal than most cat adj. are use to working with. (Do not presume that a CP is the same as a BOP, it will bury you)
Remember,those of you to take the challange, this is a business policy with coverages developed for their needs.
Apply this train of thought to the question and policy and you will be half way there.
Tomj
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joseph m lombardo jr
Registered User
Username: Jlombardo
Post Number: 17
Registered: 1-2002
| | Posted on Tuesday, April 30, 2002 - 10:04 am: | |
Jim:
-In reference to coverage for the pollution cleanup, I think it could go either way. If the ground pollution was caused by the seepage of the material then I believe there is no coverage for cleanup. However , if the ground pollution was the result of explosion, a covered peril , than a strong case for coverage for the cleanup would exist and be viable
-there would also be coverage for actual business income loss-
-there appears to be coverage for "extra expense" as defined by the policy--ISO FORM BP 00 02 12 99
-there also appears to be coverage for "valuable papers and records " destroyed on the insured premises as a result of this loss, with a L/L of $5,000
-let us not forget the coverage payment of up tp $1,000.00 to our friendly fire dept for their services.
-In referenc to my post regarding Med Pay-- when I have seen "CPP" used here in Florida it usually refers to a "commercial Property Program " which includes a property form as well as a liability form--hence, the question about med pay
Hope I got a bunch of ot right--
Take care--Joe L. |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 274
Registered: 6-2001
| | Posted on Monday, April 29, 2002 - 11:55 am: | |
Memo to John Durham: John you may need to bring in a P.A. yet if you want all of your coverage due.
I know Bill Cook, P.A. can/would get this one right. |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 273
Registered: 6-2001
| | Posted on Monday, April 29, 2002 - 11:51 am: | |
Joe, if you will go back and review my initial post, you will see that building damages are estimated to be $2 million dollars RCV and there is $3 million policy coverage available under either a CPP or BOP policy. Therefore, the assumption is that the debris removal extension is not necessary in this situation.
Where did you find a CGL policy? There was no mention of that in my initial post? (CGL coverage is not automatically attached with either a BOP or CPP)
The question that is still unanswered here, is what item(s) did Mark fail to cover which either a CPP or BOP policy in the situation as described would provide? |
joseph m lombardo jr
Registered User
Username: Jlombardo
Post Number: 16
Registered: 1-2002
| | Posted on Monday, April 29, 2002 - 10:55 am: | |
Jim--What about the debris removal--25% of the damage amount in this case. Sorry about the ccc-I reread the scenario.Also, would not the CGL portion of a CPP cover the medical expenses under COV C-Medical payments? |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 272
Registered: 6-2001
| | Posted on Monday, April 29, 2002 - 7:35 am: | |
Joe, what property of others was in the care, custody or control of John Durham? (Remember, I noted in the initial post that there is no bailee policy here).
That is/was not the answer I was looking for.
Try again. |
joseph m lombardo jr
Registered User
Username: Jlombardo
Post Number: 15
Registered: 1-2002
| | Posted on Monday, April 29, 2002 - 7:22 am: | |
2500 L/L on property of others in the ccc of the insured |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 271
Registered: 6-2001
| | Posted on Sunday, April 28, 2002 - 8:59 pm: | |
Would anyone like to comment on what Mark missed in his answer?
There simply must be at least one multi-line adjuster out there who can spot the glaring omission (hint: there is a sub-limit built into the coverage extension under both the CPP and BOP). |
mark salmon
Registered User
Username: Olderthendirt
Post Number: 171
Registered: 12-2000
| | Posted on Sunday, April 28, 2002 - 11:08 am: | |
Unfortunately don't have either wording with me, as I am on the road, as noone else was taking a shot, I tried from memory, when we don't work with policies (ie doing hail claims) we so soon forget. Doing mold claims is an excellent refresher on wordings and basic adjusting. I will take my lumps on my error and learn Thx Jim |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 266
Registered: 6-2001
| | Posted on Sunday, April 28, 2002 - 8:47 am: | |
Mark is that your final answer?
Do you have good E & O coverage?
Ever heard of a 'bad faith' claim? (For not knowing the policy and not extending due coverage)
If Mr.Durham wants all of his coverage due under his CPP or BOP policy, he has to hope they will send him an adjuster who reads the policy.
Do you want to change your answer before I explain where you did miss one part of coverage?
May I suggest you take one more look at a CPP or BOP policy and then respond again (The item covered is covered under both the CPP and BOP).
All in all you got it right EXCEPT for one item. |
mark salmon
Registered User
Username: Olderthendirt
Post Number: 170
Registered: 12-2000
| | Posted on Saturday, April 27, 2002 - 9:09 pm: | |
Fire yes
Chemical cleanup, depends on how sharp the broker generated manuscript working is and how many beers the underwriters had with the broker before agreeing to it.
Tennents contents no.
Medical no.
but if they find mold he'll get it all paid. |
Kile Anderson
Registered User
Username: Kileanderson
Post Number: 146
Registered: 1-2001
| | Posted on Saturday, April 27, 2002 - 12:41 pm: | |
John, is your warehouse business a front for Al Queda? Looks suspicious to me. |
John Durham
Registered User
Username: Johnd
Post Number: 63
Registered: 9-2000
| | Posted on Saturday, April 27, 2002 - 12:25 am: | |
Memo To Jim Flynt:
Jim, you think that is bad, my insurance company just called and cancelled the policy on my mini warehouse business, the DEA is waiting for me at home, two biker gangs are parked outside demanding their "product", the SEC just froze my bank account, the only attorney I could get on retainer, Alan Jackson, is truly busy handling mold claims, and the only calls for work I am getting are from Art Boyle. Could you possibly use Lakes in your next example?
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 262
Registered: 6-2001
| | Posted on Friday, April 26, 2002 - 4:48 pm: | |
Memo to John Durham: John it looks like you are in deep doo doo. We can't seem to find an adjuster willing to take on and handle your claim.
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Jim Flynt
Registered User
Username: Jimflynt
Post Number: 261
Registered: 6-2001
| | Posted on Thursday, April 25, 2002 - 11:03 pm: | |
Let's change the scenario a little and see how well you eagle eyed hawks do with this next coverage question, which is somewhat similar in nature to the question which Roy posed.
Suppose John Durham owns a mini-warehouse complex of 300 rental units. Suppose a renter comes along who rents a unit from John and then stores several barrels of different toxic chemicals. Suppose this tenant has been paid to dispose of these nasty chemicals legally but instead 'dumps them' and then disappears. He signed the month to month lease, paying 2 months rent (including a month security deposit) while providing forged and fake identification to John's warehouse storage property manager.
Before the expiration of the first month's lease and before it is discovered that the tenant has skipped town and is on the lam, a slow leak develops in a couple of the barrels, and the combination of the two different chemicals first ignites and then explodes, totally destroying most of the 300 mini-storage rental units and their contents.
After the fire is extinguished and investigated, it is discovered that some of the chemical residues have escaped into the soil and causing an environmental hazard which the EPA demands under penalty that John Durham clean up.
Shrapnel and flying debris from the explosion shatter nearly a hundred windows in a large adjacent apartment complex while also damaging several automobiles in the complex parking lot.
All 300 units are rented and all of the tenants are demanding that John pay for their contents inside of their units or they will sue.
Additionally, three tenants who were at the mini-warehouse storing personal belongings were injured by the explosion and taken to a local hospital for a lengthy and expensive medical recovery.
Suppose that John's mini-warehouse is covered under an unendorsed CPP or BOP policy in a loss limit amount of $3 million dollars and that John does not have a bailee policy. John also has a personal umbrella policy in the amount of $10 million dollars which is written on a following form basis.
The value of the loss to the 300 unit complex is estimated to be $2 million RCV for buildings only.
What are the coverage implications for John from this loss event?
What coverage is available, if any, for the unit tenants' contents?
What coverage, if any, is available for the pollution removal from the soils and site?
What coverage, if any, is available to meet the demands for reimbursement for medical expenses and pain and suffering from the three guest tenants injured by the explosion?
What other factors might come into play in this loss from an insurance standpoint?
Now let's see ALL of you true MULTI-LINE adjusters take a stab at this one.
(Message edited by jimflynt on April 25, 2002)
(Message edited by jimflynt on April 25, 2002)
(Message edited by jimflynt on April 25, 2002) |
D Wong Whey
Registered User
Username: Dwongwhey
Post Number: 117
Registered: 10-2001
| | Posted on Thursday, April 25, 2002 - 4:12 pm: | |
Jim it would not matter whatsoever whether the fire was intentional or not if set by the tenant as long as the landlord was innocent of knowledge or acts of the illegal operation and fire. This is of course true only with regard to the landlord's policy of indemnity.
The tenant policy would not indemnify under the circumstances given save and except for any mortgagee interest which may appear. |
Jim Docherty
Registered User
Username: Jim_docherty
Post Number: 9
Registered: 3-2002
| | Posted on Thursday, April 25, 2002 - 3:44 pm: | |
Good point WONG,
But what if the the fire was not intentional? Would a judge agree the activity was inherently risky and could therefore be anticipated and therefore covered or that the landlord should have known and therefore not covered. Or even, (heaven forbid) the policy language to mean what it says. Illegal trade is not covered.
It also depends on the Dwelling policy and, in the case of liability, endorsements included. The area where I think the companies are really concerned. Maybe there's more to this than meets the eye. |
Clayton Carr
Registered User
Username: Clayton
Post Number: 48
Registered: 11-2001
| | Posted on Thursday, April 25, 2002 - 3:21 pm: | |
Roy, interesting claim scenario.
The closest relevant policy I could grab to review is a State Farm - Rental Dwelling Policy - Special Form 3 - FP-8103.3 (5/88).
Definitions - gives a clear understanding of "insured".
Section I - "we insure for accidental direct physical loss to the described property, except as provided in - Losses Not Insured". Preceeding on the premise the fire itself was accidental, there are no obstructions to coverage yet.
LNI - I see nothing in this section that would preclude a carrier from paying.
Conditions of Section I - Concealment - if the investigation reveals the "insured" was not involved nor did he know of the activity you describe, that condition could not be relied upon to void the policy.
I'd have to say, given the scenario, reviewed within the policy mentioned, subject to conflicting case law; that indemnity is due the insured. |
D Wong Whey
Registered User
Username: Dwongwhey
Post Number: 115
Registered: 10-2001
| | Posted on Thursday, April 25, 2002 - 2:47 pm: | |
My opinion is that there would be coverage under the Insured owner's policy (as long as they were not aware of the meth lab and were in fact "innocent") but any renter policy would exclude damages because of possible intentional acts of an insured as well as the contraband and pollution exclusions within the policy.
Exact same situation as where a renter intentionally vandalizes or burns a rented premises (arson) and the property owner's policy responds or where a homeowner's policy responds to the mortgage lender arson while denying any loss for the fire setting insured. |
Jim Docherty
Registered User
Username: Jim_docherty
Post Number: 8
Registered: 3-2002
| | Posted on Thursday, April 25, 2002 - 2:24 pm: | |
Roy, the only policy I could put my hands on in short notice is the FWUA but I'm sure the ISO form has a similar exclusion. It states "We do not insure for any loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contibuting concurrently or in any sequence to the loss. 11. Contraband , or property in the course of illegal transportation or trade."
Of course, pollution is not covered.
That seems pretty clear but given that an insurance policy is a contract of adhesion and therefore the insured gets the benefit of doubt. However, Im sure some smart lawyer in combination with some dumb judge will find coverage somehow. |
Roy Cupps
Board Administrator
Username: Admin
Post Number: 128
Registered: 1-1997
| | Posted on Thursday, April 25, 2002 - 11:45 am: | |
An insured has a rental dwelling and the tenant has a meth lab in the dwelling which burst into flames. Would the fire damage be covered? Would the clean-up and removal of dangerous residual chemicals be covered? In a related article a Washington State Insurance Commisioner's Office spokeswoman stated that the issue for meth cleanup is being considered under the theory of "the innocent landload". In the same article it is reported that most companies have taken the wait and see posture. Washington reported more 1800 meth labs in 2001.
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