Care, Custody, and Control: Why GL Excludes Property You Are Working On
If you're a contractor, service technician, or repair professional, you probably assume your general liability insurance protects you if something goes wrong on a jobsite. But what happens if you accidentally damage a customer's property while it's under your supervision?
This is where the care, custody, and control exclusion becomes important. Many business owners are surprised to learn that general liability insurance often excludes certain property damage involving items they are actively working on, handling, repairing, or controlling. Understanding this exclusion can help you avoid costly coverage gaps and make better insurance decisions for your business.
What Is Care, Custody, and Control?
Care, custody, and control (often shortened to CCC) refers to property that has been entrusted to your business, is under your supervision, or is being worked on by you or your employees.
In many general liability insurance policies, damage to property in your care, custody, or control may be excluded from coverage. The reasoning is that general liability insurance is typically designed to cover damage to third-party property, not the specific property you're actively servicing or controlling.
The exact policy language and exclusions vary by insurer and policy form. Business owners should review their coverage with a licensed insurance agent to understand how these provisions may apply to their operations.
Why Does General Liability Insurance Exclude Property You're Working On?
Many business owners ask why this exclusion exists in the first place.
The answer comes down to risk allocation.
General liability insurance is generally intended to address accidental damage or injuries affecting third parties. When a contractor takes possession of a customer's property or begins working directly on it, the exposure becomes more predictable and specialized.
Insurance companies often handle those risks through other types of coverage rather than standard general liability policies.
This approach helps distinguish between:
Third-party property damage claims
Damage to the specific property being worked on
Professional mistakes and workmanship issues
Customer property under a contractor's control
Understanding these distinctions is critical when building a comprehensive insurance program.
What Does "Care, Custody, and Control" Mean in Practice?
The concept sounds straightforward, but real-world situations can be more complicated.
Generally, property may fall under your care, custody, or control when:
You have physical possession of it
You are responsible for its safekeeping
You are actively repairing it
You are transporting it
You have authority over how it is handled
The owner has temporarily entrusted it to you
Courts and insurance carriers often examine the facts of each situation individually.
Examples of Care, Custody, and Control
Consider these common examples:
Auto Repair Shop
A customer leaves a vehicle with a repair shop for brake repairs.
Because the shop has possession and control of the vehicle while work is being performed, the car may be considered in the shop's care, custody, and control.
HVAC Contractor
An HVAC technician removes a customer's furnace component for service and accidentally damages it.
The damaged component may fall within the care, custody, and control exclusion depending on the policy language and circumstances.
Equipment Repair Contractor
A contractor takes a generator back to their facility for repairs.
While the generator is being serviced, it is likely considered property in the contractor's care, custody, and control.
Computer Repair Business
A customer leaves a laptop for data recovery and repairs.
Because the laptop has been entrusted to the repair business, the CCC exclusion could become relevant if damage occurs.
The Difference Between Property You're Working On and Other Property
One area of confusion involves the difference between the property being worked on and surrounding property.
Let's look at an example.
Imagine a plumber is repairing a pipe inside a commercial building.
If the plumber accidentally damages the pipe being repaired, coverage may be limited or excluded under certain policy provisions.
However, if a sudden water leak caused by the work damages neighboring offices, flooring, or inventory, those damages may be treated differently depending on the policy and circumstances.
This distinction is one reason claims involving contractors often require detailed investigation and policy review.
Common Industries Affected by the CCC Exclusion
The care, custody, and control exclusion affects many industries, particularly businesses that regularly handle customer property.
Contractors
Contractors frequently work on:
Buildings
Equipment
Fixtures
Mechanical systems
Customer-owned property
The more hands-on the work, the greater the potential exposure.
Auto Repair Shops
Repair facilities routinely take possession of customer vehicles.
Without the appropriate coverage, damage to vehicles in their custody could create significant financial exposure.
HVAC and Mechanical Contractors
Many HVAC companies service expensive equipment owned by customers.
Damage occurring during repair, installation, or maintenance can create coverage questions.
Equipment Service Providers
Businesses that repair generators, pumps, machinery, compressors, and industrial systems often face substantial care, custody, and control risks.
Technology and Electronics Repair Businesses
Computer repair, telecommunications, and electronics service providers regularly handle high-value customer equipment.
A single incident could result in substantial losses.
Common Claim Scenarios
Understanding real-world examples can make this exclusion easier to understand.
Accidental Damage During Repairs
A contractor removes a customer's water heater and accidentally drops it during installation.
Because the damaged item is the equipment being worked on, coverage under a standard general liability policy may be limited or excluded depending on policy terms.
Customer Equipment Stored Overnight
A contractor stores customer-owned equipment in a warehouse while completing repairs.
A fire later damages the equipment.
Because the property was in the contractor's custody, the claim may trigger a review of the CCC exclusion and other applicable coverages.
Equipment Being Transported
A service company transports customer machinery to a repair facility.
During transit, the equipment is damaged.
Coverage may depend on the specific insurance policies in place and the cause of loss.
Coverage Options That May Help Address CCC Risks
Businesses exposed to care, custody, and control situations often need more than basic general liability coverage.
The appropriate solution depends on the nature of your operations and policy language.
Inland Marine Insurance
Despite its name, inland marine insurance is commonly used to help insure property moving between locations or property in a business's care.
Depending on the policy, inland marine coverage may help address certain exposures involving customer property.
This type of coverage is commonly used by:
Contractors
Equipment dealers
Repair facilities
Installation companies
Service businesses
For more information about commercial property and risk management concepts, visit the Insurance Information Institute: https://www.iii.org
Garagekeepers Coverage
Businesses involved in vehicle repair, service, storage, or parking often consider garagekeepers coverage.
This coverage is specifically designed to address certain risks involving customer vehicles left in a business's care.
Coverage provisions, exclusions, and conditions vary by policy.
Installation Floaters
Contractors who install materials or equipment may use installation floater coverage to help protect property during transit, storage, or installation.
The availability and scope of coverage depend on the specific policy.
Bailee Coverage
Businesses that temporarily possess customer property may consider bailee coverage.
A bailee is a person or business entrusted with another person's property for a specific purpose.
Coverage may help address property damage exposures involving customer property under a business's control.
Risk Management Strategies for Contractors and Service Businesses
Insurance is only part of the solution.
Good operational practices can significantly reduce the likelihood of a claim.
Train Employees Thoroughly
Proper training helps employees understand:
Safe handling procedures
Equipment operation
Customer property protection
Jobsite safety expectations
Documentation requirements
Well-trained staff can reduce avoidable losses.
Inspect Property Before Work Begins
Document the condition of customer property before starting work.
Consider:
Photographs
Written inspections
Signed work orders
Customer acknowledgments
These records may help reduce disputes later.
Use Clear Service Agreements
Contracts should clearly explain:
Scope of work
Responsibilities
Limitations
Inspection procedures
Customer expectations
Legal requirements vary by state and are subject to change, so businesses should consult qualified legal counsel regarding contract language.
Review Insurance Annually
As a business grows, its risks often change.
Annual insurance reviews can help identify new exposures and determine whether additional coverages should be considered.
The U.S. Small Business Administration offers resources on business risk management and operational planning at https://www.sba.gov
Why Contractors Should Not Assume General Liability Covers Everything
One of the most common insurance misconceptions is that general liability automatically covers any damage caused during a job.
In reality, insurance policies contain exclusions, limitations, conditions, and definitions that can significantly affect coverage.
The care, custody, and control exclusion is an important example of why policy reviews matter.
A contractor working on customer equipment, a mechanic repairing vehicles, or a technician servicing electronics may all have exposures that fall outside standard general liability protection.
Understanding those exposures before a loss occurs is often far less expensive than discovering them afterward.
Frequently Asked Questions
What does care, custody, and control mean in insurance?
Care, custody, and control refers to property that a business possesses, supervises, stores, transports, or is actively working on. Damage to such property may be excluded under certain general liability policies.
Does general liability insurance cover property I'm repairing?
Not always. Property being repaired, serviced, or controlled by your business may be subject to exclusions depending on the policy language and claim circumstances.
What insurance covers customer property in my possession?
Depending on your operations, options may include inland marine insurance, garagekeepers coverage, bailee coverage, or other specialized policies. Coverage varies by policy and insurer.
Does the CCC exclusion apply to contractors?
Yes. Contractors are among the businesses most commonly affected by care, custody, and control exclusions because they frequently work on customer-owned property.
How can I find out if my policy contains a CCC exclusion?
Review your policy documents and discuss them with a licensed insurance agent. An agent can help explain how exclusions and coverage provisions may apply to your specific business.
Protect Your Business From Coverage Gaps
The care, custody, and control exclusion is one of the most important insurance concepts contractors and service businesses should understand. If your business handles, repairs, transports, stores, or works on customer property, general liability insurance alone may not address every exposure you face.
The right combination of insurance coverage depends on your operations, industry, and risk profile. A licensed insurance professional can help identify potential gaps and explain options that may better align with your business needs.
Ready to review your coverage? Request a free, no-obligation quote from Wexford Insurance today:
The Wexford Insurance team can help contractors and service businesses evaluate risks, understand policy limitations, and explore insurance solutions tailored to their operations.
