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The Rogak Report: 1 March 2004

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  • therogakreport
    NO LIABILITY COVERAGE EXISTS FOR NON-OWNED TRAILERS BEING HAULED BY INSURED, UNLESS TRAILER ENDORSEMENT IS PART OF POLICY Andrew Mundo Inc. v. Liberty Mut.
    Message 1 of 1 , Mar 1, 2004
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      NO LIABILITY COVERAGE EXISTS FOR NON-OWNED TRAILERS BEING HAULED BY
      INSURED, UNLESS TRAILER ENDORSEMENT IS PART OF POLICY

      Andrew Mundo Inc. v. Liberty Mut. Group, 2004 WL 352102 (1st Dept
      2004)

      This was a declaratory judgment action. The insured sought a
      declaration that Liberty Mutual was obligated to provide defense and
      indemnity to it in an underlying action for property damage sustained
      by a trailer that plaintiff was hauling. Supreme Court, Bronx
      County, granted Liberty's motion for summary judgment, declaring that
      it is not so obligated by reason of the policy's Care, Custody or
      Control exclusion. The Appellate Division affimed.

      By its terms, the policy's Care, Custody or Control exclusion applies
      to "[p]roperty damage to property owned or transported by the insured
      or in the insured's care, custody or control." Thus, "any obligation
      [Liberty] has to defend and indemnify [the insured] for property
      damage is limited to vehicles that were neither owned by plaintiff
      nor being transported by him or otherwise under his care, custody or
      control when damaged. Since the trailer in question, which is owned
      by the subrogor of the plaintiff in the underlying action, was under
      the care, custody or control of plaintiff herein at the time of the
      accident, the exclusion applies."

      This conclusion "appears consistent with the policy's declarations
      page, which indicates that plaintiff purchased coverage
      for 'liability,' 'personal injury protection' and 'uninsured
      motorists,' but not, inter alia, 'trailer interchange comprehensive
      coverage,' 'trailer interchange collision coverage,' 'physical damage
      comprehensive coverage' or 'physical damage collision coverage.' As
      defendant maintains, the policy is for 'liability,' not 'collision.'"

      The Court held that it "would reach the same result, i.e., a
      declaration that defendant is not obligated to defend or indemnify
      plaintiff in the underlying action, even if we were to construe
      defendant's disclaimer as based exclusively, rather than
      additionally, on the claim that the damaged trailer is not the
      trailer listed on the policy's schedule of covered autos. In this
      regard, the disclaimer states that the VIN number of the trailer
      involved in the accident is 2A5WF8B4PTO53386, whereas the policy
      lists the covered trailer's VIN number as 2A9SWF8BOPT053392.
      Plaintiff contends that the two numbers are close enough to permit an
      inference that the difference is due to a typographical error. On the
      present record, there is nothing to support such inference and no
      further inquiry is warranted."

      Comment: Put simply, if the insured is hauling a trailer owned by
      someone else, and that trailer is damaged while in the care custody
      and control of the insured, the insured has no liability coverage in
      a suit by the trailer's owner. Unless, of course, the insured has
      purchased the trailer liability endorsements.
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