What is Care, Custody and Control Endorsement in a Commercial General Liability Insurance Policy?

What is Care, Custody and Control Endorsement in a CGL Policy?

“Care Custody and Control” Endorsement in a CGL Policy extends the coverage for Bodily Injury and Property Damage Claims to Third-Party Property which is damaged while in the Care, Custody or Control of the Insured. Care, Custody and Control Coverage is offered as an Endorsement to the Commercial General Liability Insurance Policy.

Understanding Care, Custody and Control

A CGL Insurance Policy defines Care, Custody and Control as below:

1. Care: Care pertains to the responsibility to protect and look after someone else’s property with a reasonable standard of care when you are temporarily in charge of the property.
2. Custody: Custody involves the Insured having physical possession or control of someone else’s property. It implies that the Insured is responsible for keeping the property safe and has the authority to manage, handle, or make decisions regarding the property.
3. Control: Control refers to the power or authority the Insured Company has over someone else’s property.

How does the Care, Custody and Control Endorsement Work?

A Commercial General Liability Insurance Policy provides coverage for the Legal Liability of the Insured to pay for Bodily Injury or Property Damage suffered by a Third Party on the Insured Company’s Premises or because of using the Insured Company’s Products. However, a CGL Insurance Policy excludes coverage for damage to Third Party Property which is temporarily in the Insured’s possession. This is where the Care, Custody or Control Endorsement comes into play. The Care, Custody or Control Endorsement extends CGL Policy Coverage to cover property which the Insured Company is responsible for but does not own. The Insurer may charge additional Insurance Premium to grant Care, Custody or Control Coverage under the CGL Policy.

Which situations require Care, Custody and Control Endorsement under a CGL Policy?

The requirement of a Care, Custody and Control Endorsement can be best explained with the help of examples:

1. A Mechanic damages a customer’s car which was in his custody and which he had given for repairs.
2. Another example is that of a Jeweller who damages the customer’s jewellery which was given to him for repairs.

Conclusion

Businesses should take care of their customers property and any damage to the property could lead to an expensive lawsuit. It is important to protect your business from such lawsuits. The Care, Custody, and Control endorsement is a critical tool for businesses looking to mitigate potential liabilities for businesses where the temporary possession or control of others’ property is inherent to their operations. Thus, any business dealing with customers’ property should make sure to avail the Care Custody and Control Coverage under their CGL Policy. If you have any questions about any Insurance Policy or Insurance Claim, reach out to us at insurance@qian.co.in or call us on 022-35134695. We would be glad to assist you.