If you’re in the business of caring for or bringing up children, you should have insurance coverage covering the costs associated with the responsibility. However, this type of liability insurance doesn’t always cover care costs. In addition to removing compensation for damages to your insured personal property, this kind of coverage also excludes coverage for damage to property that is not yours. This can include goods that you transport or rental equipment. You may have to pay for repairs or replace the property if your child is in your care.
Benefits
Care custody and control liability insurance is a specialty coverage that protects a business when an individual loses or damages property under your control or care. Care custody and control coverage is often excluded from commercial general liability policies, though specific insurance contracts are designed for this type of risk. A general “working definition” of care custody and control exposure is having someone else’s property while working on it, such as installing a customer’s car or kitchen cabinets.
Care custody and control liability insurance provides various benefits to people running businesses related to children, including protection against lawsuits arising from injuries and property damage. Its exclusions are limited to property damage and bodily injury, but other types of general liability coverage aren’t covered by care custody and control liability insurance.
Care custody and control liability insurance can help protect property owners who have rented or leased space. This type of coverage is designed to protect the owner from losses from damage to another person’s property, including real estate and personal property. It is also useful for those who own and manage property damaged or stolen by others.
Exclusions
The Care, Custody, and Control (CCC) exclusion applies to most liability insurance policies and eliminates coverage for damage to the insured’s property. This exclusion may apply to rented equipment, goods in transit, and personal property. In addition, if the insured is temporarily caring for a family member, this exclusion can prevent coverage for damage to the family’s property.
An insurer can deny coverage if the insured owes a duty of care to a minor. An example of this is the case of Riley v. Maison Orleans II, Inc., where a court determined that the insured was objectively reasonable given the statutory requirements, state laws, and the insured’s interpretation of the exclusion.
The court found that the care, custody, and control exclusion was unambiguous and rebuked the insurer’s argument that the policy did not require an additional insured endorsement. The cost of litigation and defending a lawsuit against an insured is high, and the extra insured endorsement will help offset that expense.
Limitations
Care, custody, and control liability insurance limits cover legal liabilities for damage to someone else’s property. This type of insurance is available through regional insurers. These policies usually limit coverage to $5,000 in damages. Losses over this amount are subject to policy exclusions. In certain situations, the insured can choose a policy without limits and still get the protection needed.
Many forms of liability insurance have a care, custody, or control (CCC) exclusion. These exclusions prevent coverage for damage to the insured’s property. However, these insurance policies also cover more specific forms of coverage, such as garage keepers or motor truck cargo. These policies are specifically designed to cover this type of exposure. Generally, CCC coverage applies only when the insured physically possess another person’s property.
Cost
A common exclusion in liability insurance is the care, custody, and control exclusion. This exclusion means that the insurer will not cover any losses if you or someone else causes damage to someone else’s property while you are in their care. This exclusion typically applies to properties you rent or temporarily store on your premises.
Care, custody, and control liability insurance are available through a regional insurer. The policy will typically have a $5,000 limit. The exclusion still applies if a loss exceeds the limit of $5,000. However, many regional insurers have begun to offer a CCC coverage endorsement.
The cost of care, custody, and control liability insurance is usually a separate policy from your commercial general liability insurance. Purchasing this coverage separately from your GL policy will ensure you are covered if someone causes damage to a third party’s property.
