Homeowners coverage

[mweil]

I would appreciate advice on an insurance claim/ potential lawsuit against a large insurance company.
My father (who was a mechanical engineer) invested in/ bought a portion of a restaurant in South Carolina sometime in may or June of 2000. It burned to the ground in June of 2000. Unfortunately, he had not purchased and was not aware that there was not a separate insurance policy for the restaurant. However, upon reading his homeowners policy I believe that this property is covered. Here are excerpts from the policy which is form HO-0003S Ed. 4-91:

Agreement
We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of the policy.

Definitions
. . .
2. "business" includes trade, profession or occupation
. . .
5. "occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:
a. bodily injury; or
b. property damage.
6. "property damage" means physical injury to, destruction of, or loss of use of tangible property.
. . .

Coverage C Personal Property
We cover personal property owned or used by an insured while it is anywhere in the world.
. . .
Special Limits of Liability
. . .
9. $250 on property, away from the residence premises, used at any time or in any manner for any business purpose.
. . .
We insure for direct physical loss to the property described in Coverage C caused by a peril listed below unless the loss is excluded in Section 1 - Exclusions.
1. Fire or lightning.

Apparently, the company had no intent to insure such property. However, I believe that the language of the policy does not exclude this coverage and if anything it is ambiguous as to what constitutes personal property. Additionally, I do not believe that his investment in the restaurant can be defined as his trade, profession or occupation. Therefore, I do not think that Special Limit of Liability #9 is applicable. Please, let me know if there is anything else you feel might be pertinent as well as your take on my arguments.

Thank you,
Megan Weil

 

[ALawyer]

Sorry, no lawyer can suggest an answer without looking at the entire policy. If there is a major financial loss, you may want to speak to a lawyer about not only a potential claim on the homeowners (which I doubt would succeed) but a potential claim against the insurance broker you used, the lawyer who worked with you on the purchase, and even the seller for failing to transfer the policy in some circumstances.

 

[mduryea]

I believe this coverage is for a business in the home, it would all pertain to the stipulations in your state, somewhere in the policy it should state the location that they are insuring, I would think that if the location of the restaurant is not listed, there is no coverage. You might want to check with the agent that sold the policy

 

[mweil]

Thank you for your replies! It is unfortunate that my father trusted the previous owner to have the correct insurance, therefore he did not involve his broker or attorney. He does not want to sue the prior owner.

Furthermore, this business was not physically located on the residence premises. Additionally, it does not say on the policy that personal property must be listed in the declarations and indeed I do not think it does.

The insurance company contends that this loss does not constitute personal property. However, they have failed to show me in the policy where personal property is defined. Additionally, they have said that even if it was covered it would be limited coverage due to their interpretation of this restaurant as my dad's business. I counter that my father was an engineer by trade, profession and occupation (which is how the policy defines business).