Explain Care Custody and Control CCC

Care, Custody, and Control (CCC) is an insurance concept that refers to situations where a business has possession and responsibility for property owned by others. If a business is holding, repairing, or storing a customer’s property, it is considered to be within the business’s care, custody, and control. This term is significant because many standard liability policies exclude coverage for damage to property in the insured’s care, custody, or control. Businesses needing coverage for such property typically need specialized insurance policies.

Importance of Care, Custody, and Control (CCC)

1. Defines Responsibility:

   1. When a business has someone else’s property in its care, custody, and control, it assumes a degree of responsibility for that property’s safety. If the property is damaged, lost, or stolen, the business could be held liable for repair or replacement costs, depending on the circumstances.

2. Coverage Exclusion in General Liability Policies:

   1. Most Commercial General Liability (CGL) policies contain a CCC exclusion. This means that if a customer’s property is damaged while in the insured’s care, custody, or control, the CGL policy will not cover the loss. For example, if a mechanic damages a customer’s car during a repair, a standard CGL policy would not cover the repair costs.

3. Requires Specialized Coverage:

   1. To protect against CCC-related risks, businesses often need additional policies, such as Garage Keepers Insurance, Bailee’s Coverage, or Inland Marine Insurance. These coverages are specifically designed to provide financial protection for property that the business temporarily possesses.

Examples of Care, Custody, and Control Situations

1. Auto Repair Shops:

   1. When an auto repair shop takes possession of a customer’s vehicle for service, the vehicle is in the shop’s care, custody, and control. If the vehicle is damaged during a repair or while parked on the property, standard liability insurance would exclude coverage, and the shop would need Garage Keepers Insurance.

2. Dry Cleaners:

   1. A dry cleaning business has customers’ clothing in its care, custody, and control while cleaning it. If a garment is damaged or lost, general liability coverage wouldn’t apply, so the business would need Bailee’s Coverage to protect against such risks.

3. Warehousing and Storage:

   1. A warehouse that stores products for other businesses has those items in its care, custody, and control. If the products are damaged or lost while in storage, the warehouse operator could be liable, and Warehouseman’s Legal Liability insurance or Inland Marine Insurance would provide the necessary coverage.

Why CCC Coverage Is Important

1. Protects Against Financial Loss:

   1. CCC coverage provides financial protection to the business in case property owned by others is damaged or lost while in their care. Without it, the business could be forced to pay out-of-pocket for costly repairs or replacements.

2. Meets Customer Expectations and Builds Trust:

   1. Customers expect that their property will be returned in the same condition they left it. By having CCC coverage, a business demonstrates its commitment to responsibly managing and protecting customer property, building customer trust.

3. Ensures Compliance with Contracts:

   1. Many contracts, especially in industries like logistics, require businesses to carry CCC coverage to ensure that they can cover potential damages to others’ property. This is common in lease agreements, storage contracts, and vendor agreements.

4. Covers a Wide Range of Risks:

   1. CCC coverage can be tailored to cover various perils, including theft, fire, accidental damage, and more. This allows businesses to protect against risks specific to their industry and operations.

How CCC Coverage Works in Practice

Suppose a furniture repair shop accepts a customer’s sofa for repairs. While the sofa is in the shop, a fire damages it. Because the sofa was in the shop’s care, custody, and control, a standard general liability policy would not cover the loss. However, if the shop has Bailee’s Coverage or Inland Marine Insurance with CCC protection, it would cover the cost to repair or replace the sofa, minimizing the shop’s out-of-pocket expenses.

Summary

Care, Custody, and Control (CCC) is a significant risk area for businesses handling other people’s property. Since standard general liability policies exclude coverage for property in the insured’s care, custody, or control, businesses need specialized CCC coverage to protect against the financial risks associated with damage or loss of such property. Ensuring the right CCC coverage is in place helps businesses manage their liabilities, meet customer expectations, and maintain compliance with industry and contractual requirements.

If you want to speak with an agent, contact Shahn from Client's Choice Insurance at 719-286-9425. Or, email [email protected].