Special Bulletin from Mover’s Choice – Commercial Property Coverage Updates

Building and Personal Property Form

CP 00 10

Debris Removal: The additional limit provided is increased from $10,000 to $25,000. When no Covered Property sustains direct physical loss there is coverage in the amount of $5,000 provided for removal of debris of others’property.

Coverage Impact: Coverage is increased and expanded in definition

Building and Personal Property Form

CP 00 10

Fire Department Service Charge: The policy clarifies that the $1000.00 limit provided applies to each premises insured.

Coverage Impact: No change in coverage

CP 00 10 (various)

Business Personal Property in Described Structures: The coverage provided for Business Personal Property is clarified to cover both in the building or structures covered in the policy.

Coverage Impact: No change in coverage

Building and Personal Property Form

CP 00 10 (various)

Coverage Radius: The language is clarified as relates “where”coverage must occur for coverage to apply. The form extends coverage to 100 feet from the building or 100 feet from the described premises, whichever distance is greater.

Coverage Impact: The revision broadens coverage with respect to a tenant in a multiple-occupancy building in such situation where the premises are described in terms of the actual area (quarters) occupied by the tenant. Note: many company forms already include this clarification.

Building and Personal Property Form

CP 00 10 (various)

Property in Storage Units: A new coverage extension is introduced on the Commercial Property Form for Business Personal Property Temporarily in Portable Storage Units. The coverage is for 90 days with a sub-limit of $10,000. The property must be located within 100 feet of the described premises. A higher limit can be indicated on the Declarations Page.

Coverage Impact: This can be considered an extension of coverage, however, if an insurer previously treated property in storage as property in the open then then coverage is decreased to the sub-limit.

Building and Personal Property Form

CP 00 10

Newly Acquired Business Personal Property: Currently the Commercial Property forms provide $100,000 additional coverage at each building covering newly acquired business personal property. This provision has been removed. There is no change for newly acquired business personal property located at newly acquired locations. If the insured has “newly acquired”property at their location, the coverage should be increased accordingly to reflect that limit.

Coverage Impact: Coverage is reduced

Building and Personal Property Form

CP 00 10

Debris Removal: The additional limit provided is increased from $10,000 to $25,000. When no Covered Property sustains direct physical loss there is coverage in the amount of $5,000 provided for removal of debris of others’property.

Coverage Impact: Coverage is increased and expanded in definition

Building and Personal Property Form

CP 00 10

Debris Removal: The additional limit provided is increased from $10,000 to $25,000. When no Covered Property sustains direct physical loss there is coverage in the amount of $5,000 provided for removal of debris of others’property.

Coverage Impact: Coverage is increased and expanded in definition

Building and Personal Property Form

CP 00 10 &Cause of Loss Forms

Vegetated Roofs: This is one of the new “green”extensions in Commercial Property. Currently the property form excludes trees, shrubs, plants and lawns and then sub-limits the coverage. The property form is revised to include lawns, trees shrubs and plants which are part of a vegetated roof and thereby treating such property as an insured part of the building so that an existing vegetated roof can be replaced with like kind in the event of a loss. There are some exclusions that are revised to relate directly to a vegetated roof.

Coverage Impact: Coverage is broadened.

Building and Personal Property Form

CP 00 10 &Business Income Form (various)

Electronic Data in Building Equipment: Currently ISO Commercial Property forms limit coverage for electronic data to $2,500 on an annual aggregate basis. The form is revised to remove the $2,500 limitation with respect to loss or damage to electronic data which is integrated in and operates or controls the building’s elevator, lightning, heating, and ventilation, air conditioning or security systems.

Coverage Impact: Coverage is broadened

Building and Personal Property Form

CP 00 10

Business Income FormCP 00 30/00 32

Cause of Loss Forms(various)

Ordinance or Law Exclusion: The form is revised to include the word “compliance”. The new form states the “enforcement of or compliance with any ordinance or law. This is a clarification of language

Coverage Impact: No change in coverage

Building and Personal Property Form

CP 00 10

Business Income FormCP 00 30/00 32

Cause of Loss Forms(various)

Options for Increasing Specified Limits: The coverage forms currently include the ability to increase coverage via an entry on the Declarations Page for certain categories of coverage. This change allows for increased coverage via Declarations for the additional coverages of Electronic Data; Newly Acquired Locations;Interruption of Computer Operations and Limitations for Theft.

Coverage Impact: These changes are new coverage options

Business Income Form

CP 00 30 and CP 00 32

Extended Business Income, Extended Period of Indemnity: The Business Income forms provide automatic coverage for 30 days’following the end of the period of restoration for residual loss of income. The form revises the 30 days to 60 days.

Coverage Impact: Coverage is increased. Note: Many insurance company forms automatically include more than 30 days.

Cause of Loss CP10 10, CP10 20, CP 10 30

Earth Movement Exclusion: The term “earthquake”now incorporates tremors and aftershocks. Language is added to the Earth Movement exclusion to reinforce that earth movement is excluded regardless of whether it is caused by an act of nature or is otherwise caused.

Coverage Impact: No change in coverage

Cause of Loss CP10 10, CP10 20, CP 10 30

Water Exclusion: The Water Exclusion CP 1032 and is now incorporated in the base policy forms

Coverage Impact: No change in coverage

Cause of Loss

CP 10 30

Entrusted Property: The revision is included to distinguish between those who have a role in the insured’s business such as partners/employees and others to whom property may be entrusted such as bailees or tenants. Specifically there is an exclusion for loss or damage caused by dishonest or criminal acts by anyone to whom the insured entrusts the property.

Coverage Impact: Coverage is broadened

Cause of Loss

CP 10 30

Wear and Tear Exclusion—Special Form: The coverage is expanded to include coverage for water damage in the “specified causes of loss”to include accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of certain off-premises systems due to wear and tear.

Coverage Impact: Coverage is broadened

Cause of Loss

CP 10 30

Covered Cause of Loss: The term “risk of”is deleted. This change has been done specifically to clarify the collapse exclusion but has a broader impact. This is modified for clarity purposes

Coverage Impact: No change in coverage

Business Income Report/Work Sheet:

CP 15 15

Debris Removal:
The $10,000 additional limit for debris removal is increased to $25,000. Note: Many company forms automatically include this limit automatically.

Outdoor Trees, Shrubs and Plants:
This specifies that debris removal is included in the limit provided for this coverage

Coverage Impact: Coverage is broadened

Radio or Television Antennas—Business Income or Extra Expense

CP 15 50

The endorsement removes a “reference”to the Cause of Loss Earthquake. If the Earthquake Form were attached to the policy it’s terms and conditions are therein specified

Coverage Impact: No change in coverage

Utility Services— Overhead Transmission Lines

CP 04 17 (Direct) and CP 15 45 (Time Element)

The endorsement clarifies that the term “transmission lines”also includes “distribution lines”which is the vernacular in the power industry for a system that provides electricity to residential and commercial users by reducing voltage through the use of substations, transformers and other devices. The forms now reinforce the intent to cover both transmission and distribution systems which serve in the transmission of power or communication service.

Coverage Impact: No change in coverage

Ordinance or Law

CP 04 05;CP 04 38;CP 15 01;CP 15 02;CP 15 08;CP 15 09;CP15 25;CP 15 31;CP 15 34

Ordinance or Law: The endorsement form is revised in the same manner as the exclusion in the Coverage Forms to include the word “compliance”. The new form states the “enforcement of or compliance with any ordinance or law. This is a clarification of language

Coverage Impact: No change in coverage

Condominium Commercial Unit-Owners Changes—Standard Property Policy

CP 17 98

The endorsement modifies three sections of the Condominium Unit Owners Policy: Coverage Radius;Business Personal Property in Described Structures;and Newly Acquired Property.
1. Coverage Radius is modified to state 100 feet from the building or described premises whichever is greater

2. Clarifying that coverage applies both in a building or structureCoverage Impact: No change in coverage

Building Glass Tenants Policy Endorsement

CP 14 70

This endorsement was first introduced in 2007 to facilitate writing coverage for building glass under a tenant’s policy that did not cover the building. This endorsement simply allows for the deductible for this coverage to be added on the endorsement rather than on the Declarations Page

Coverage Impact: No change in coverage

Theft Exclusion Endorsement

CP 10 33

The Theft Exclusion Endorsement currently does not contain a schedule. The new edition date will display a schedule of locations so that there is clarity as to which location the exclusion applies

Coverage Impact: No change in coverage

Flood Coverage Endorsement and Schedule

CP 10 65;CP DS 65

Currently the Flood Endorsement states there is no coverage for loss from any Flood that begins before or within 72 hours after the inception date of the endorsement. The prior form did not make any distinction concerning renewal policies. The revised form provides that the 72 hour waiting period will not apply when the prior policy included flood coverage and the policy periods are consecutive without a break in coverage.

Coverage Impact: Coverage is broadened

Payroll Limitation or Exclusion Option

CP 15 10

The payroll endorsement is being modified to provide a means of limiting or excluding the payroll expense of “any category of employees or individual employees”The term “ordinary payroll expense”and its definition are removed from the endorsement. The title, also, will no longer refer to the word “ordinary”and the word “ordinary”will no longer appear in other sections such as the “coinsurance section”. The revised endorsement serves the same purpose as the prior one but can be used to address any category of employee on the insured’s payroll.

Coverage Impact: No change in intent—clarification of definition

Condominium Commercial Unit-Owners Optional Coverage: Loss Assessment

CP 04 18

Currently the endorsement places a $1,000 limitation on an assessment as a result of a deductible on the condominium association policy. This endorsement provides a means for selecting a higher limit.

Coverage Impact: Coverage is broadened

Utility Services—Wastewater Removal (Time Element)

CP 15 45

The Utility Service Time Element endorsement is being revised to add a new category of utility service: wastewater removal property. By definition, wastewater removal property is a utility system for removing wastewater and sewage from the described premises other than a system designed primarily for draining storm water. The utility property includes sewer mains, pumping stations and similar equipment for moving the effluent to a holding, treatment or disposal facility;and includes such facilities.

Coverage Impact: Coverage is broadened

Earthquake Sprinkler Leakage Deductible

CP 10 40;CP 10 45

In 1999, the EQSL Endorsement CP 10 39 was withdrawn from the series and EQSL could be purchased by activating the EQSL ONLY option on the EQ endorsements CP 10 40 and CP 10 45. The revision in this form adds language providing that the EQ deductible provisions outlined in the EQ endorsement (that is, the percentage deductible) do not apply to the EQSL—Only coverage. Instead the Fire deductible applies.

Coverage Impact: Coverage is clarified and broadened

Builders Risk—Theft of Building Materials, Fixtures, Machinery, Equipment

CP 11 21

This change relates back to the issue of “entrusted property”discussed above. Entrusted Property: The revision is included to distinguish between those who have a role in the insured’s business such as partners/employees and others to whom property may be entrusted such as bailees or tenants. Specifically there is an exclusion for loss or damage caused by dishonest or criminal acts by anyone to whom the insured entrusts the property.

Coverage Impact: There is no change in “intended coverage”

Green Upgrades Endorsement Revision

CP 04 02

The schedule on the form is revised to identify which property is subject to upgrade when not all personal property is not to be covered for Green Upgrades.

Coverage Impact: No change in coverage

Exclusion of Loss Due to By-Products of Production or Processing Operations (Rental Properties)

CP 10 34

New form introduced to be attached to policies issued to owners and tenants of rental premises.

Discussion of the change is included above.Coverage Impact: There is no change in “intended coverage”

Specified Property Away from Premises

CP 04 04

New form introduced to provide coverage for business personal property temporarily away from the described premises in the course of daily business activities, while in the care, custody or control of the insured or an employee of the insured.

Coverage Impact: Coverage is broadened

Higher Limits

CP 04 08

Currently the insurance form has many options to increase coverage via the Declarations Page. This endorsement is an alternative to activating the coverages on the Declarations Page by using this multi-purpose endorsement

Coverage Impact: No change in coverage but new coverage option

Increase in Rebuilding Expenses Following Disaster CP 04 09

The new endorsement provides an option for insuring additional expenses when the costs of labor and/or building materials increase as a result of a disaster AND the total cost of repair or replacement exceeds the applicable limit of insurance. Some significant sections of the endorsement include:
1. Buildings to be insured are indicated on the endorsement
2. Coverage will only apply as a result of an event that is declared a disaster as well as damage resulting from an event which occurs in close proximity to the disaster
3. Coverage is on an annual aggregate basis
4. The maximum amount of additional coverage is determined by applying a specified percentage to the limit of insurance for specific insurance.

Coverage Impact: New Coverage Option

This endorsement is introduced as a response to nationwide disasters and catastrophic events that have tested the limits of the policy as relates costs of labor;cost of materials due to demand and limited resources (demand surge). The ISO circular references Hurricanes Katrina and Rita wherein estimates per square footage of housing reconstruction quadrupled in the first six months after the events.

Equipment Breakdown

CP 10 46

This is a new optional endorsement which is compatible with the Special Form Cause of Loss CP 00 13.

Discussion of the change is included aboveCoverage Impact: New Coverage Option

Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment

CP10 47

Because of the introduction of the new Equipment Breakdown Form, the ISO has also introduced the Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment to allow the insurance companies to either suspend or reinstate coverage for certain pieces of equipment.

Discussion of the change is included aboveCoverage Impact: New Coverage Option

Deductible By Location

CP 03 29

Currently there is a Multiple Deductible Form CP 03 20 adopted in most states which is designed to allow for the selection of different deductible by location and peril. This schedule of endorsement shows separate locations and the deductible for each location.

Coverage Impact: This is a new optional way to show deductibles but does not affect existing deductible options.

Limitations on Coverage for Roof Surfacing

CP 10 36

This endorsement provides options for insuring roof surfacing on an ACV basis and for excluding cosmetic damage to roof surfacing. The cosmetic exclusion option applies only to the perils of wind and hail, and could be written without regard to the underlying valuation clause.

Coverage Impact: New Coverage Option. This would be chosen by an insurer when they deem it necessary typically on an older building

Increase in Rebuilding Expenses Following Disaster

CP 04 09

This is a new endorsement to add additional expenses following a disaster.

Discussion of the change is included aboveCoverage Impact: New Coverage Option

Dependent Properties in the Supply Chain (Business Interruption)

Endorsement to CP 15 01;CP 15 02;CP 15 08;CP 15 09;CP 15 34.

Dependent Property Coverage is written by scheduling the business locations that the insured is “dependent upon”and have chosen to insure. The new endorsement allows for secondary dependencies.

Discussion of the change is included aboveCoverage Impact: New Coverage Option

Theft of Building Materials and Supplies (Other Than Builders Risk)

CP 10 44

Currently there is a limitation under the Special Cause of Loss form for theft coverage for building materials and supplies that are not part of the building or structure to that which is held for sale by the insured. The new endorsement provides coverage for the theft of building materials and supplies that are located on or within 100 feet of the premises when such property is intended to become a permanent part of the building or structure.

Coverage Impact: New Coverage Option

Protective Safeguards (Fire)

CP 04 11

The new endorsement replaces the interline form IL 04 15. This endorsement, therefore, only pertains to Commercial Property insurance and contains the same provisions as the current endorsement.

Coverage Impact: No Change in Coverage

Food Contamination (Business Interruption and Extra Expense)

CP 15 05

This new option covers extra expenses and business income loses arising out of food contamination and pertains to the Business Income And Extra Expense Coverage Form. Coverage is limited to loss of income/extra expense due to the closure of the business. Covered expenses include: cost of cleaning equipment;cost of replacing food;medical testing and vaccination and advertising expense.

Coverage Impact: New Coverage Option