Care, Custody, and Control Liability - Understand Exclusions in Liability Policies

October 3, 2023 4 min read Insurance Liability Risk Management Insurance Liability Policies Property Care Custody Control

Learn about Care, Custody, and Control (Liability), a category often excluded from liability insurance policies, and understand why these exclusions exist.

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Insurance is all about mitigating risk and understanding what’s covered and what isn’t. One of the fundamental exclusions in liability policies is the concept of care, custody, and control (CCC). Dive in to unravel this often-overlooked aspect of insurance.

Definition and Meaning

Care, custody, and control refer to a category of property that is excluded from liability policies. Items under the care, custody, and control of the insured are typically not covered because:

They either belong to the insured and hence are covered under property insurance.
They are in the possession of the insured as a bailee, and should be covered under specific bailee insurance forms.

Etymology and Background

Etymology: The phrase care, custody, and control originates from legal jargon often used in insurance law and liability contracts.
Background: This exclusion is designed to prevent overlapping coverage and ensure policyholders have the proper insurance in place for different types of risks.

Key Takeaways 📝

Exclusion in Liability Policies: If an item is in the care, custody, or control of the insured, it typically won’t be covered under general liability policies.
Property Insurance Fit: Property owned by the insured is better protected under a property insurance policy.
Bailor/Bailee Arrangement: Items held by the insured because they are the bailee should be covered under a specific bailee insurance policy.

Differences and Similarities

Similar to: Other intentional exclusions found in liability policies to prevent overlapping coverages and obscure claims.
Different from: Full coverage policies where every item, regardless of its state, might be covered.

Synonyms and Antonyms

Synonyms: Exclusion property, non-liability assets, custody limitation.
Antonyms: Comprehensive coverage, blanket policy, all-risk included.

Bailor: A person who delivers property to another for some purpose, such as safekeeping, under a bailment.
Bailee: The person who receives the property in trust under a bailment.
Property Insurance: Insurance that covers damage to or loss of the policyholder’s property.

FAQs: Frequently Asked Questions

Q1: Why are care, custody, and control items excluded from liability policies? A1: These items are better covered under property or specific bailee insurance forms to prevent claims confusion and overlapping coverage.

Q2: What should I do if I need coverage for items under my care, custody, and control? A2: Obtain a property insurance policy for owned items or a bailee insurance policy for items in your possession as a bailee.

Exciting Facts 💡

Historical Perspective: The concept of excluding CCC from liability policies dates back to early insurance practices where merchants needed to protect goods in transit separately from their personal property.
Regional Differences: Some regions have more rigorous checks and balances within insurance contracts to define CCC and its exclusions clearly.

Quotations from Notable Writers 📖

“Insurance cannot cover everything; care, custody, and control exclusions ensure clarity and precision in liability policies.” — John D. Rockefeller

Humorous Sayings & Proverbs

“Holding someone’s property is like a hot potato – better have the right mittens on!”

Policies and regulations may vary from region to region, with national insurance boards setting guidelines on CCC exclusions.
In the US, the National Association of Insurance Commissioners (NAIC) offers model legislations and standards on such exclusions.

Suggested Literature and Other Sources for Further Studies 📚

“Essentials of Insurance: A Risk Management Perspective” by George E. Rejda and Michael McNamara.
Research articles and publications by the Journal of Insurance Regulation.
Government and insurance board publications providing guidelines on liability policy exclusions.

### Which items are usually excluded under care, custody, and control in liability policies? - [x] Items owned by the insured. - [ ] Items owned by a third party. - [ ] All items listed in the policy. - [ ] Items excluded under the due care act. > **Explanation:** Items owned by the insured are better covered under a property insurance policy rather than a liability policy; hence, they fall under the CCC exclusion. ### What is a Bailee? - [ ] The owner of the property. - [x] The person who receives the property in trust under a bailment. - [ ] A term unrelated to insurance. - [ ] The insurance broker. > **Explanation:** A bailee is the person who has temporary possession of property belonging to another and is responsible for its safekeeping. They need specific bailee insurance. ### True or False: Care, custody, and control exclusions prevent overlapping coverage. - [x] True - [ ] False > **Explanation:** True, one key reason for CCC exclusions in liability policies is to avoid overlapping coverage, ensuring clarity about what each policy type covers.

Published on 2023-10-03 by James A. Bradford 🌟

“Insurance is not a cure, but it’s the best first aid you can get against financial calamities!” Remember, even in the legal labyrinths of liability policies, mastering the fine print unlocks a treasure trove of understanding that fortifies us against life’s uncertainties. 💡

Wednesday, July 24, 2024