The "Care, Custody, or Control (CCC)" exclusion is a standard provision found in most Commercial General Liability (CGL) insurance policies. It's often misunderstood, leading businesses to believe they have coverage for situations where they actually don't.

What is the "Care, Custody, or Control" Exclusion within Business Insurance?

Simply put, this exclusion states that your CGL policy will not cover property damage to personal property that is in your "care, custody, or control" at the time of the damage.

The terms are generally interpreted as:

Care: You are temporarily responsible for overseeing or watching over the property.

Custody: You have physical possession or are safeguarding the property.

Control: You have the authority or power to manage, direct, or oversee the property.

If any one of these conditions is met, and the property is damaged, the exclusion is likely to apply.

 Why Does it Matter So Much?

This exclusion matters immensely because it creates a significant coverage gap for many businesses that routinely handle property belonging to their customers or clients. Here's why it's so critical:

It Leaves Common Business Scenarios Uncovered:

Repair Shops: If an auto mechanic damages a client's car while it's in the shop, or an electronics repair technician damages a customer's laptop, the CGL policy's CCC exclusion would likely deny coverage for the damage to the vehicle or laptop itself.

Dry Cleaners/Laundromats: If a customer's clothes are lost or damaged while being cleaned.

Storage Facilities: If items being temporarily stored for clients are damaged.

Pet Sitters/Dog Walkers:

If a pet (considered personal property) is injured or damages a third party's property while under your care.

Contractors (in specific situations): 

If a plumber damages a client's expensive fixture while installing it, or an HVAC tech damages a client's existing furnace while working on the system (though this can be nuanced and sometimes distinguished from "property being worked on").

CGL Is Not Property Insurance for Others' Goods: Your General Liability policy is designed to cover your liability for property damage you cause to property you don't own and aren't directly possessing or controlling. For items temporarily in your possession, the insurer expects that either the property owner has their own insurance, or you have a specialized policy.

Potential for Significant Financial Loss: If an expensive piece of equipment, a valuable vehicle, or precious artwork is damaged while in your care, custody, or control, and your CGL policy excludes it, your business could be solely responsible for the cost of repair or replacement. This could be a substantial financial hit, potentially leading to lawsuits and reputational damage.

How to Address the Care, Custody and Control Exclusion:

Recognizing this critical gap is the first step. To ensure you're protected, businesses that frequently handle others' property should consider specialized coverages:

Bailee's Customer Coverage (or Bailee's Insurance): This is a type of Inland Marine insurance specifically designed for businesses that temporarily hold property belonging to others (e.g., dry cleaners, repair shops, warehouses). It covers property damage to customers' goods while they are in your care, custody, or control due to specified perils (or sometimes on an "all-risk" basis).

Garage Keepers Legal Liability: Essential for businesses that work on or store customers' vehicles (e.g., auto repair shops, body shops, parking garages). This covers damage to the vehicles themselves while they are in your possession.

Specific Endorsements/Buy-Backs: Some insurers offer specific endorsements to the CGL policy that provide a limited amount of coverage for certain types of property in your care, custody, or control. These typically have lower sub-limits than a dedicated Bailee's policy and might be restricted to specific perils.

The takeaway: Don't assume your general liability policy is a catch-all for any damage you cause. The "Care, Custody, or Control" exclusion is a standard and very significant limitation. If your business regularly takes possession of clients' property, discuss this specific risk with your insurance broker to ensure you have the appropriate, specialized coverage in place. It's a key step to protecting your business from potentially devastating financial surprises.