Resource Library

Personal Property of Others and MCIT Coverage

Date: April 2020

MCIT coverage applies to property and equipment owned by the member when it is included on the property or inland marine schedule. What is less well understood is how MCIT coverage applies to property owned by others while on a member’s premises.

Personal Property of Officers, Employees and Volunteers

Situations can arise when property owned by others may assist in the furtherance of the member’s business. MCIT coverage extends to property owned by a member’s officers, employees and volunteers if the property is being used for the member’s benefit and is within 500 feet of a building that is scheduled for building and contents coverage.

For example, if a county highway mechanic brings his or her tools to work at the highway garage, property coverage applies in the event of loss or damage so long as the employee’s tools are used for the county’s benefit and the county has scheduled the highway garage for building and contents coverage.

The maximum amount of coverage available is $5,000 for all such property damaged in a loss event. Common events can include theft, fire, water loss and collapse of a building. It is not necessary to schedule the property if a member believes $5,000 is an adequate limit to cover all of the personal property at that location. Higher limits are available, but members need to add the property to the property schedule and will incur the related coverage charge. Any loss will be subject to the member’s property deductible.

Coverage does not apply to personal property owned by officers, employees and volunteers such as paintings, pictures, radios, plants, etc. that employees bring to the workplace for their personal use or enjoyment. (Employees should check with their personal insurance agents/companies for possible coverage under their homeowner’s/renter’s policies).

Personal Property of Others

MCIT also provides up to $2,000 coverage for personal property of others that is in the member’s custody when the member is under obligation to cover it. An example is an inmates’ personal property that is turned over to the sheriff for the term of incarceration. Many of the conditions noted in the previous section apply to this coverage extension. It is not necessary to schedule the property unless a limit in excess of $2,000 is needed. Any loss will be subject to the member’s property deductible.

Care, Custody and Control Liability Exclusion

The coverage discussed in the previous sections applies to the loss or damage to physical property under a member’s first-party property coverage. MCIT excludes liability coverage for any personal property of others that is under the member’s care, custody or control.

Given that, if a third party makes a claim alleging that the member’s negligence caused his or her property to be damaged, MCIT’s general liability coverage would not respond if the property in question is under the member’s care, custody or control.

Risk Management Recommendations

  • Review the MCIT Coverage Document and be familiar with the coverage extensions for personal property of others.
  • Evaluate the merits and risks of allowing officers, employees and volunteers to use their personal property to conduct member business.
  • Take inventory of all personal property of others used at a location and consider adding it to the schedule if the value exceeds $5,000.
  • Determine if $2,000 is sufficient to cover personal property of others in the member’s custody, and if not work with MCIT to add it to the schedule.
  • Communicate the limits of coverage to officials, employees and volunteers.

Members who have questions regarding coverage should contact their MCIT risk management consultant toll-free at 1.866.547.6516.

The information contained in this document is intended for general information purposes only and does not constitute legal or coverage advice on any specific matter.