Also known as: in trust · on commission · trust or commission
Written by attorneys · grounded in primary & secondary sources — see below
A provision in a property insurance policy that extends coverage to personal property held by the insured but not owned by the insured. The clause reaches goods stored for others, consigned for sale, or otherwise entrusted to the insured's possession.
Ivan Ivanov stores furniture for Ilana Isaacs under a consignment agreement. A fire destroys the furniture. Because the policy contains an in trust or on commission clause, coverage extends to the consigned goods even though Ivan does not own them.
Integrity Partners and Ideal Solutions form a joint venture. One partner stores venture-owned equipment in its warehouse. A policy containing an in trust or on commission clause covers loss to that equipment even though the named insured does not own it outright.
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The clause covers personal property that the insured holds for others, whether stored, consigned, or otherwise entrusted. Courts construe the phrase broadly to reach any goods the insured possesses but does not own.
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No. The entire purpose of the clause is to protect property the insured does not own but holds for third parties. Ownership by the insured is not required.
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The clause extends coverage to any personal property the insured holds for others. It does not depend on equitable-conversion doctrines that govern real-property risk of loss.
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Yes. When one venturer holds title to assets purchased with venture funds, the property is regarded as held in trust for the venture and falls within the clause's protection.
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