Property Damage

     General--Many GL exclusions exclude pd along with bi but starting with exclusion “j” there are “5 BIG” exclusions that just exclude property damage.  When it comes to confusion few things cause more trouble, misunderstanding, and just down right mistrust as the property damage exclusions.  Comments like the following are often heard:

    *If this is not covered why do I bother to buy insurance!!

    *I thought I told you to cover me for everything!!

    *You guys give it with the big words and take it with the small words!!

     Many agents have had their first real “lesson” with an uncovered claim and the scramble to explain it to the insured not only for that claim but also for the future.  This process can be even more complicated because many claims departments have different opinions on these exclusions even when they use the same policy!!

Golden Rules--Property Damage exclusions are divided into two major categories:

        *Those that effect operations--VERB exclusions--while the work is going on!

          *Those that effect completed operations--the occurrence “occurs” after the work is completed.

                 *Many things excluded by these pd exclusions (especially on the operations side) are covered-----                they are just covered somewhere else! Most notably under Marine Insurance!!

Background--Many reasons are given for these exclusions but among the most             


*These exclusions preclude coverage for faulty workmanship.                                                                 *Insurance should not be a warranty bond.
*We want to avoid the “mend & fix” type loss; the small loss!
*Coverage should be found somewhere else!

The logic is sometimes weak and many carriers are now offering improvements!


*Remember that everything comes down to when the bi or pd “occurs” (occurrence form); not when the work                   was done or when the contract was signed or when the certificate was issued.

*Look for improvements from your carriers!!  There are some excellent products available!

*You might have a battle with the word “occurrence”. If this is unclear go back and check some of the links relative to occurrence.

*You must pass  ALL  exclusion tests not just one!!!

Why you think “property damage” or 
“physical damage”


Next--Property Damage Exclusions