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Loading and Unloading – What you need to Know

from PLC Insurance

How are items that are damaged while being loaded and unloaded from a vehicle covered by insurance?  The client is moving customers’ goods and they damage nearby items, such as a wall or floor.  There is damage to both the nearby item and customers’ goods.   While the damage to the item being moved is covered under Bailee Coverage (Customers’ Goods in the care, custody and control of the client) the property damage to nearby item is more complex.

Often, first assumptions are the General Liability policy would cover this situation; however, there is an exclusion stating that if the customers’ goods are being loaded to, or unloaded from an auto, the General Liability policy will not cover resulting property damage or bodily injury.   The policy defines Loading and Unloading as the handling of property while it is being moved from the place where it is accepted for movement into or onto an auto, while it is in or on the auto, and while it is being moved from the auto to the place where it is finally delivered.

The insurance industry considers Loading and Unloading as a continuation of use of an auto for transport of property, and resulting damages are covered by the Business Auto Liability policy.

Let’s run through some examples:

Example 1: Sarah’s Piano Tuning and Repair is picking up a piano for restoration using her truck as transport. While Sarah’s crew is moving the piano a crew member drops their end, breaking the piano leg and scratches their client’s brand new hardwood floor.

Which insurance policy will cover repairs to the floor?

  • A General Liability policy will not cover repair to the floor because of loading and unloading exclusion.
  • A Business Auto policy will cover damage to the floor.
  • A Personal Auto policy may, or may not cover the loading or unloading exposure.  This varies by policy and should be discussed with the insurance carrier.

Which insurance policy will cover damage to the piano?

  • Cargo and/or Bailee (Customers’ Goods) coverage would cover costs of repairs to the piano minus any deductible.

Example 2: Sarah’s Piano Tuning and Repair is moving a piano from upstairs to downstairs of her client’s home.   While Sarah’s crew is moving the piano downstairs the piano leg goes through the wall, causing damage to wall and finish on the piano.

Which insurance policy will cover repairs to the wall?

  • Because an auto was not being used to transport the piano, the General Liability policy will cover the damage to the wall.  The loading and unloading exclusion does not apply
  • Auto policies would not respond as use of an auto was not involved.

Which insurance policy will cover damage to the piano?

  • Cargo coverage would cover the cost of repairing the finish on the piano minus any deductible.

In summary, if you are moving customer’s goods with an auto, you should purchase a Business Auto policy to cover any property damage or bodily injury that occurs as a result of that move.

Common Questions:

How long has Loading and Unloading exclusion been a part of the General Liability policy?

  • Since 1973.

Is this Loading and Unloading exclusion specific to the Piano Technicians Policies written through Liberty Mutual?

  • No. With rare exceptions, this exclusion is found on all General Liability Business policies.

Where can we pick up loading and unloading coverage?

  • Under a Business Auto policy.

Where would damage to the customers’ goods be covered?

  • Cargo coverage would cover Damage to the client’s property being moved.

Want to find out more about your loading Insurance options?

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Lynnwood loading insurance

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