Recently, in an unpublished opinion, a New Jersey appellate court in the case of Beauty Plus Trading Co. Inc. v. National Union Fire Insurance Co. of Pittsburgh, considered whether an insurance policy’s “loading and unloading” provision precluded coverage to an insured for damages arising out of a theft of a shipment of human hair weaves.
The insured received its goods on a Friday evening, but decided not to unload the container of goods until the following Monday. Instead of unloading, the insured’s staff Beauty Plus Trading Co. Inc. v. National Union Fire Insurance Co. of Pittsburgh cut the container’s seal and left it on the loading bay outside of the warehouse. The following night, an individual stole the container housing over $283,000 worth of human hair weaves.
The policy contained a “loading and unloading” section which provided coverage for the insured’s goods for 24-hours after the company received a shipment. In this case, the insured received a shipment at 5:00 p.m. on a Friday evening and the theft took place at 9:00 p.m. the following Saturday night. According to the policy, the goods were insured until 5:00 p.m. on Saturday.
The insured tried to argue that coverage under the loading and unloading provision should have been extended through the following Monday under the so-called “business day” rule. This rule states that where a party’s time to perform its obligations under an insurance policy expires on a weekend or holiday, it is entitled to push the deadline to fulfill those obligations to the next business day. Here, the policyholder argued that the rule should have applied because it did not receive the goods for unloading until the end of the day on Friday. The judge, however, found that the rule was inapplicable. The loading and unloading provision did not require the insured to unload the goods or perform any obligation during the 24-hours of coverage and the insured could leave the goods in the container as it chose to do. The court found that the plain terms of the policy precluded coverage for this loss.
Thanks to Chelsea Rendelman for her contribution to this post