Ask an Expert


A motor vehicle dealership holds a BI policy and insures their full gross profit. The operative clause reads:

".....the insurer agrees to indemnify the insured for loss resulting from interruption to or interference with the insured©s business in connection with damage during the period of insurance to any buildings or other property owned, used or leased by the insured, in accordance with the terms of the policy."

Given the business activity, the insured's stock in trade is insured under a CMV policy. It's conceivable that an insurable event gives rise to a claim under the motor policy but not the material damage policy (which insures plant and incidentals kept within the building).

In this scenario, would a claim for property damage to the vehicles only (which prevents the insured from selling them) be sufficient trigger for them to have a BI claim?

Reply:  Crossley Gates

There is usually only meant to be cover under the BI Policy if the property damaged is:

1. Insured under the MD policy, or

2. Would be if the insured owned it.

MD policies don't usually insure vehicles, although that policy does cover stock in trade, so are they covered this way? If not, I suggest you need an endorsement to specifically bring the vehicles within the BI Policy insuring clause.

December 2020

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