TX - Hair Salon BOP GL Claim - Water Damage Coverage Question

Good afternoon - Looking for some clarification. Texas General Liability Insurance policy. BOP. Insured is hair salon. Hose going to shampoo bowl splits and floods her suite and her neighbors. Insured files claim with her insurance as does the neighbor. My insured's insurance carrier is stating that they are NOT going to cover her claim, or the neighboring suites claim because 1) there is an exclusion to property damage to other's property in their care.