Commercial insurance policies may contain what is known as the “entrustment exclusion.” This exclusion excludes damage resulting from any dishonest or criminal act by you, the insured, or anyone to whom you entrust the property with.
An example of this “entrustment exclusion” can be found in Grover Commercial Enterprises, Inc. v. Aspen Insurance UK, LTD., 41 Fla. L. Weekly D2098a (Fla. 3d DCA 2016):
We will not pay for loss or damage caused by or resulting from any of the following:
. . . .
h. Dishonest or criminal act by you, any of your partners, members, officers, managers, employees (including leased employees), directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose:
(1) Acting alone or in collusion with others;
(2) Whether or not occurring during the hours of employment.
This exclusion does not apply to acts of destruction by your employees (including leased employees); but theft by employees (including leased employees) is not covered.
In this case, the commercial landlord had a commercial insurance policy that covered business personal property and real property. A tenant vacated its leased space and stole the landlord’s personal property and damaged the space. The landlord submitted a claim to its insurer, but the insurer denied coverage under the “entrustment exclusion.” This exclusion includes tenants and lessees since they fall within the scope of “anyone to whom you [the insured]entrust the property for any purpose.”
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