I borrowed a $1,200 Festool sander from a buddy on the job site because mine died. While using it, the motor smoked and seized. I felt terrible. I called my General Liability insurer to see if they would pay to replace his tool. The answer was a hard “No.”
Key Takeaways
- “Care, Custody, or Control” (CCC): This is the #1 exclusion in General Liability. It says liability insurance does not cover damage to personal property that is in your possession (care/custody).
- Voluntary Payments: Liability insurance pays if you are sued for negligence. It does not pay just because you feel morally obligated to replace something.
- Bailee Coverage: To cover items that belong to others but are in your care, you need “Bailee” coverage or a “Property of Others” endorsement.
- Self-Insure the Small Stuff: For a $1,200 tool, it’s rarely worth filing a claim even if you could. The premium hike isn’t worth it. Pay cash.
The “Why” (The Trap): Liability vs. Property
General Liability protects you if you drop the sander on the homeowner’s foot (Bodily Injury) or on their hardwood floor (Property Damage).
It does not protect the sander itself. Because you were holding it and using it, it was in your “Care, Custody, or Control.” Insurance expects you to treat borrowed property as your own. Since your policy doesn’t cover your sander for burnout, it won’t cover your friend’s sander for burnout either.
The Investigation: “I Called Them”
I asked how to cover “Borrowed Gear.”
1. General Liability (Next / Thimble)
- The Verdict: Denied. CCC Exclusion applies.
2. Inland Marine (Property of Others)
- The Verdict: Some Inland Marine policies have a clause for “Property of Others for which you are liable.”
- The Catch: It usually covers theft or fire of the borrowed tool, not mechanical breakdown (seizing up).
3. Tool Rental Policy
- The Verdict: If I had rented it formally, rental insurance would cover it. Since it was a casual borrow, no coverage exists.
Comparison Table: Liability for Borrowed Items
| Scenario | General Liability | Inland Marine (with “Property of Others”) |
| You drop borrowed tool on client’s floor | Covers Floor (Not Tool) | Covers Tool (Maybe) |
| Borrowed tool is stolen from your truck | Denied | Covered |
| Borrowed tool breaks (Motor/wear) | Denied | Denied |
Step-by-Step Action Plan
- Don’t Borrow High-Value Tools: Unless you are willing to buy it if it breaks.
- Check “Property of Others” Limits: Look at your Inland Marine policy. Ensure the limit for “Property of Others” is non-zero.
- Written Agreements: If borrowing something massive (like a specialized saw), write a quick text: “I’m responsible if this breaks.” This creates a contract liability that might trigger certain contract-specific coverages, though mechanical breakdown is still tough.
- Pay Cash: For the $1,200 sander, just buy him a new one. It preserves the relationship and keeps your claims history clean.
FAQ
Q: Does his insurance cover it?
A: Probably not. His policy excludes “Voluntary Parting” (he gave it to you) and “Mechanical Breakdown.”
Q: What if I borrowed it from a rental yard?
A: That’s different. See the next article on Rented Tools.
[IMAGE: Diagram explaining “Care, Custody, Control” – highlighting that property in your hands is excluded from Liability.]