General liability (GL) policies often have a care, custody, or control (CCC) exclusion written into them. In simple terms, this means that if you take possession of someone else’s property and the property is damaged while in your possession, your insurer could deny the damage claim based on the CCC exclusion.
Defining Care, Custody and Control
The exposure that triggers the CCC exclusion is created by having someone else’s property in your possession. The exclusion applies only to personal property, not real property such as buildings or permanently attached fixtures. Real and personal property are addressed separately in a liability policy.
The CCC exclusion applies if any of the following three terms are true—not all need to be met. The three terms are defined as:
- Care is to have temporary charge, or temporarily having the responsibility of watching over property
- Custody implies safekeeping of property
- Control refers to having power over property
This exclusion has many nuances, and the outcome of a claim depends on individual circumstances. There is no one-size-fits-all answer to what falls under a CCC exclusion: the only definitive answer lives in the policy language.
Minor changes in the circumstances—such as how much access the owner has to the property that was damaged—can result in a totally different outcome as to whether property is in the care, custody, or control of the insured.
Court cases dealing with the CCC exclusion typically rule that control exercised by the insured must be exclusive, meaning the insured must have total control, not shared with any other entity, for the exclusion to apply.
Avoid Coverage Gaps
The best action you can take to avoid a denied claim based on the CCC exclusion is to be sure you have appropriate coverage before taking a customer’s property into your possession. There are many specialized policies available that can properly protect you and your business. Contact a licensed independent agent today to make sure you have adequate coverage for other people’s property left in your care.
