Insurance Coverage Demand for Garage Owner Policy

This is a demand for insurance coverage made on behalf of a small business. In this case, the insured suffered a massive loss when his hydraulic lift "exploded" in his auto repar garage. The insurer denied coverage for the replacement of the hydraulic lift contending that the lift contained "underground pressurized vessels" which were specifically excluded. This demand letter resulted in the insurer reversing its position and providing the insured with full coverage for his loss, including the replacement of his very expensive hydraulic lifts.

This circumstance is particularly interesting because the hydraulic lift was actually built into the foundation of the garage building and came up through the foundation. Replacement of the garage floor was an additional item that was very costly along with removal of contaminated soil from the gallons of leaking hydraulic fluid. In the end, the most persuasive argument is that the garage owner, who purchased a "garage owner's policy", which specifically listed "lifts", could reasonably expect that he woyuld be covered for such a loss. It would be unfair to enforce an exclusion for "underground vessels" when the lifts are specifically listed as covered.

Of course, there were other significant arguments made such as the hydraulic lifts, in this circumstance, would have to be considered permanent fixtures as the lifts were built directly into the foundation. Had the insuer not reversed itself, we would have filed suit and pursued this matter to a legal conclusion by summary judgment or a coverage trial. The insured was overjoyed with the result!

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