July 20th, 2016

By Paul J. Rippy

You have heard the horror stories from your co-workers.  An insured calls in or leaves a message stating, “Hi there!  This is Will Rogers from Tall Tales Helicopter Charters.  I was just heading out the door and wanted to confirm my son’s pet gecko, Petals, as well as my wife’s $3500 unlicensed four wheeler is covered by our commercial policy under Business Personal Property.  Thanks, knew you would know.”

According to ISO Form 97064 (3/08), Business Personal Property [BPP] provides coverage for any furniture and fixtures, machinery and equipment, stock, as well as all other personal property owned by you and used in your business.  BPP will also cover personal property that you lease and have a contractual duty to insured.

What about Mr. Rogers commercial policy for Tall Tales?  Your first thought would probably be that Petals the Gecko would not be covered because commercial property policies exclude animals.  However, what if Will Jr. is actually boarding Petals for a friend, or unknown to you, selling geckos as a side business from the insured’s offices?

According to Form 97064, animals which are owned by others and boarded by the insured or used as “stock” inside the insured’s buildings are covered as BPP.

As with Petals, your initial reaction to an unlicensed four wheeler might be, “BPP does not cover autos.”  BPP does not provide property damage coverage for vehicles [or self-propelled machines] which are licensed for use on public roads or operated away from the described premises.

However, Mr. Rogers has an unlicensed vehicle for which Form 97064 does not address.  Yes, property damage coverage will be available on the four wheeler, but how far does the vehicle travel?

BPP coverage is only available within 1,000 feet of the described premises.  In reality 1,000 feet is not a great distance, therefore, the insured would need to confirm the vehicles driving duties.