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Property & Casualty Insurance/personal property owned by others in my residence


I was wondering if you can help me.
My client had a covered water loss on his property.
He was also safekeeping around $18,000 worth of electronics for a school they are acquainted with to be given as gifts to students of the school.
His HO3 policy does appear to contain verbiage covering personal property of others on his premises. It also contains verbiage that any property utilized for "business" is limited to $2,500. The policy's definition of business I believe is "for profit".
Do you believe there is coverage in this situation?
Thanks for your assistance!

Hey Henry,

I'll preface this by making a couple of disclaimers.  First, what I say here is based on limited knowledge of the actual claim and without seeing the actual policy forms.  Second, I will give a hypothetical answer based on ISO forms, understanding that there are a number of company-specific policies and/or endorsements that may differ from ISO.  Third, the company adjuster will be able to do a complete investigation and make the coverage interpretation based on the forms that are in effect.

All of that said, even adjusters can make incorrect decisions.  Once the claim is adjusted and the company sends their decision in writing, citing the applicable coverage or exclusions that apply, I would be more than happy to render an opinion based on the written confirmation or denial.

Now...on to what the policy says.

As you pointed out, the insuring agreement for Coverage C includes personal property of others at the residence premises.  That clearly begins to grant coverage.  The internal limits under Coverage C limits property used PRIMARILY for "business" purposes.  The term "business" is defined as trade, profession, or occupation.  The "for profit" that you refer to has to do with not described as trade, profession, or occupation.  

The real question is: What was the purpose of the property?  If it was not going to be used by the school to teach, but rather to give as gifts to students, I'm not sure I can see any justification for calling it "business" property.  It may have been owned by the school, but unless it was intended for business use, I would certainly argue for coverage.

I hope that helps a little.  Let me know if you have any additional questions.

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Jay K. Williams, AAI, AIP, CIC, CRM


I can answer questions relating to the following coverages: personal auto; homeowners; commercial auto; commercial liability; commercial property; business income and all other property and casualty coverages.


I have been in the insurance industry in Florida since 1979. I am currently the president of a Florida domestic insurance company subsidiary. I've taught continuing education classes in Florida and across the country. I am quite familiar with all coverages including Florida Condominium master policies and unit owner policies. I also specialize in agent professional liability. I have been a professional educator since 2001.

I am a member of the Florida Associaion of Insurance Agents, the state affiliate of the Independent Insurance Agents and Brokers of America.

I currently carry the following professional designations: Accredited Advisor in Insurance (AAI) Associate in Insurance Production (AIP) Certified Insurance Counselor (CIC) Certified Risk Manager (CRM)

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