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Background—Problems—Solutions

Summary: “Fire legal liability” is a way to describe the risk that all persons, businesses, institutions, etc., are exposed to by way of responsibility for damage to property of others in their care, custody, or control. It requires special attention because forms providing property damage liability insurance—for example, the commercial general liability (CGL) form—usually do not apply to the exposure of property damage to personal property in the care, custody, or control of the insured. This discussion reviews the fire legal liability exposure and various solutions that have evolved to protect insureds against it.

Topics covered:IntroductionLiability solutionsOther risk management techniques

Introduction

There is no one simple way to handle the fire legal liability exposure. Consequently, special provisions are required and these may take several different forms. The topic is treated in various other discussions: for details of coverage regarding commercial, institutional, and other similar insureds under the legal liability coverage part, see Legal Liability Coverage Form ; for the current CGL form’s fire damage coverage, see CGL Coverage Form–Coverage A ; and, for fire legal liability coverage as provided under standard homeowners policies—see Homeowners Section II Exclusions .

Liability Solutions

The issue of fire legal liability insurance generally involves the following situations. The insured may be liable for damage to personal property, or for damage to real property, in his or her care, custody, or control. Occasionally the insured is liable for both.

First, when it comes to liability for damage to personal property in the insured’s care, custody, or control, there are special forms (bailees type coverage) for the express purpose of insuring the property of others. Some, like laundries and dry cleaners coverage, the jewelers block form, and furriers’ customers forms, provide direct (that is, regardless of legal liability) insurance on the customer’s property. On the other hand, garage owners can purchase garagekeepers legal liability coverage that, as the name implies, provides protection to the garage owner for legal liability for damage to a customer’s car (of course, garagekeepers coverage can be purchased to apply on a direct primary basis or a direct excess basis); for information on garagekeepers coverage, see Garage Liability Section III for information).

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