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Florida Account
Coverage - Garagekeepers written comp and collision , legal liability basis. Lot was secured.
Have a claim where vandals broke in and vandalized autos and stole autos.
Account written Legal Liability Basis.
Is the Insured covered ? Insurance Company is denying the claims saying the Insured is not legally liability.
Is this correct ?
At this point, the owners would have to go back under their own insurance.
If the account was written under direct primary, the claim would be paid.
Thoughts ?

You should know if he is covered, you wrote the policy! If the vehicles were secured and there was no neglegence on the part of your insured. The insurance company is not going to pay because of the type of policy you sold him. The Legal Liability Policy only covers when your client is neglegent. If you intended for this type of claim to be covered you should have sold a direct primary policy.

Unfortunately, no one wins in this situation.

My advice is to stay away from Legal Liability when writing GKL. Direct Primary is the way to go.

It is in the insured's best interest to pay a little bit more money and get Direct Primary. Hopefully you explained or wrote out to the insured the difference between the two coverages, and documented that conversation. He/she might try to pin this on your E&O.

Garage owner is pissed at agent because agent potentially didn't explain what is covered. Insured's clients are pissed because their cars got stolen.

Will a personal auto policy's comp coverage pay out on this and then go after the garage? Has anyone seen this before?

Californiadude: Of course the car owners could turn it in under their Comp, but why would their insurers try to go back on the garage? After all, if the garage was negligent, the Legal Liability would have paid the claim. So to subrogate to the garage would be a waste of time because there was no negligence, a prerequisite for subrogating.

Let's imagine one of the car owners hires a lawyer and takes the auto garage to court. A judge declares the garage responsible (legally liable) for the damage/theft to the vehicle. Now does the carrier pay the claim? A court of law has declared the garage legally liable. I have seen this happen in NY when a carrier denied because they felt there was no 'legal liability.' After the court decision they re-opened the claim and paid. FL may be different. This is based on my personal experience of 41+ years as a P&C agent/broker in NY. Maybe I was seeing and hearing things....... regards, Dar Novak AAI