Commercial Package Policy (CPP)

Coverage Extension: Valuable Papers & Records

$2500 for the cost to research, replace, or restore lost information from valuable papers & records, other than electronic data

Coverage Extension: Non-owned Detached Trailers

$5000 coverage applies ONLY if the loss occurs when the trailer is in the insured's custody and ONLY if the insured is contractually obligated to pay for the loss or damage a higher limit may be shown in the declarations this coverage is considered EXCESS over the other insurance

Commercial Property Components

1. Declarations page 2. One or more Property Coverage Forms 3.One or more Cause of Loss Forms 4. Property Conditions 5. Any applicable endorsements added

Condominium Commercial Unit-Owners provisions

1. NO buildings coverage is provided because the condo building is jointly owned & insured under the association coverage form 2. improvements & betterments are included as BPP if owned by the insured, -unless the condo association agreement states that the association will provide coverage for these items. 3. the condo insurance condition, which states that if both the unit owner & association have insurance covering the same property, the condo commercial unit-owners coverage insurance is excess and will NOT contribute to the association insurance.

Commercial Property Coverage Form Endorsements

1. Ordinance or Law Endorsement 2. Spoilage endorsement 3. Peak Season Limit of insurance endorsement 4. value reporting form

4 Components of a CPP (applies to all Commercial insurance types)

1. Policy Cover 2. Common declarations 3. Interline Endorsements 4. Common Policy Conditions

BPP Loss Conditions

Abandonment -insured CANNOT abandon property to the insurer Appraisal -if insurer & insured cannot agree on the value of property, both parties may make written demand for an appraisal of the loss -decision agreed upon during the appraisal process will be binding on both parties

Basic Form (named peril) - Cause of Loss comparison between DP, HO, & Commercial Property Policy

DP Basic Form includes -ONLY fire, lightning, & internal explosion -the rest of the common basic perils are available for additional premium -basic form aka DP 1 HO Policy Basic Form Includes: -all 10 Common basic perils + theft -HO8 Commercial Property Policy Basic form includes: -all 10 common basic perils -Sprinkler leakage -sinkhole collapse.

Broad Form - Cause of Loss comparison between DP, HO, & Commercial Property Policy

DP Broad Form includes: -ALL 10 basic perils -ALL 9 broad perils -& windstorm or hail -riot or civil commotion -aircraft -vehicles -smoke -vandalism & malicious mischief (VMM) -volcanic eruption -aka DP 2 HO Broad Form Includes: -ALL 10 basic perils -ALL 9 broad perils -& theft -aka HO-2 Commercial Property Broad Form Includes: -ALL 10 basic perils -ALL 9 broad perils -& sprinkler leakage -sinkhole collapse -water damage

Common Policy Declarations Page

Declarations page provides the information as to who, what, when, where, & how much -note that "when" refers to when the policy takes effect -"who" refers to the first named insured this page also lists the 7 coverage parts that may be made apart of the policy -if there is a premium amount shown for any of these coverage parts, that coverage will be provided by the policy -if no premium amount is show, there is NO coverage for that coverage part. contains: -names of the parties to the contract, -the policy period -a description of the first name insured's business, -a schedule of coverage parts and the premiums charged for each, -and the total policy premium.

resumption of operations

a condition that allows the insurer to reduce the amount of the loss if the insured does NOT resume operations as quickly as possbile

Vacancy Permit Endorsement

a property insurance endorsement that suspends some or all of the coverage restrictions that apply to buildings that have been vacant for >60 days.

period of restoration

begins 72 hours after the first physical loss for business income it begins immediately for extra expense coverage

extension of replacement cost to personal property of others

if the RC option is selected the insured can purchase this option as well if a written contract exists that outlines the insured's liability for third party property, the policy will pay NO more than what's stipulated in that contract, but CANNOT exceed the RC of the item or the policy limit.

Extended business income

in the event a business income loss is paid, the policy provides time for the insured to resume normal income levels. the additional coverage has a beginning & ending time frame as follows: 1. begins on the date the property (except finished stock) is actually repairs and operations are resumed 2. ends on the earlier of the date the insured could restore operations with reasonable speed & diligence, or 60 days after the date operations are actually resumed. an option to extend this time period can be activated with the entry of a new date on the declarations page of the policy

Building Coverage

insures the following: -building described in declarations -outdoor fixtures & furniture -items used to service the property -permanently installed machinery & equipment -& additions under construction (including materials, supplies & equipment)

BPP & Duties in the event of loss or damage

notify policy if law has been broken give insurer prompt notice of loss, & description of how, when, & where it occurred take ALL reasonable steps to protect property from further damage provide an inventory of both damaged & undamaged property send insurer signed, sworn proof of loss within 60 days of insurers request

direct damage coverage

property insurance that pays the value of property that has been damaged by a covered cause of loss OR the cost of its repair or replacement.

pro rata basis

proportional allocation amounts are assigned based on each participants proportional share

BPP coverage form & Optional Coverages

the following optional coverages MUST be shown in the declarations page and apply separately to each item. the following are optional coverages: 1. Agreed Value 2. Inflation Guard 3. Replacement Cost 4. Extension of RC to personal property of others

Coverage Extension: Outdoor Property

up to $1000 for fences, radio & TV antennas (including satellite dishes) or $250 for trees, shrubs, & plants damaged or destroyed by: -fire -lightning -explosion -riot or civil commotion -or aircraft

Condominium Association Coverage Form & optional coverages

1. Agreed value 2. Inflation Guard 3. RC

Commercial Property Coverage Forms

1. Building & Personal Property -includes direct damage form -also includes basic, broad, & special causes of loss forms. 2. Condominium 3. Builders Risk 4. Business Income & Extra expense

2 Coverage extensions included in Builders Risk Coverage Form

1. Building Materials & supplies of others -up tp $5000 of coverage can be extended to include construction materials that would become a permanent part of the building -this is considered an additional amount of insurance 2. Sod, trees, shrubs, & plants -up to $1000 of coverage can be extended to a loss outside of the building if the loss or damage is caused by fire, lightning, explosion, riot, or civil commotion, or aircraft -the most an insurer will pay for this extension is $1000, but no more than $250 per tree, shrub or plant.

6 Common Policy Conditions

1. Cancellation -first named insured may cancel the policy at any time by giving written notice to the insurer -the insurer may cancel for an allowable reason by giving the property notice to the first named insured, based on state regulations 2. Policy Changes -changes in the terms can only be made by endorsement issued by the insurer -request for change in the policy requested by the insured MUST be by the first named insured 3. Examination of Books & Records (Audit by Insurer) -insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 3 years (36 months) after the end of policy. -insurer may examine books and adjust premium during and up to 3 years after the policy period 4. Inspection by Insurer & Surveys -insurer can establish insurability and determine proper premium charges at renewal -insurer is granted the right, but does NOT have an obligation to make inspections, surveys, reports, & recommendations relating to the insurance -an insurer does NOT warrant that conditions are safe and comply with laws, regulations, standards or codes 5. Premiums -responsibility for payment of the premiums rests with first named insured -all refunds will also be issued to the first named insured 6. Transfer of Rights & Duties -the rights & duties of the insured under the policy can be transferred to another ONLY with the written consent of the insurer. -however, in the event of the insured's death, rights and duties are automatically transferred to the insured's legal representative.

7 Types of Commercial Insurance

1. Commercial General Liability (CGL) 2. Commercial Property 3. Commercial Inland Marine 4. Commercial Auto 5. Equipment breakdown coverage 6. Commercial Crime 7. Farm Coverage -Each of these 7 types have their own coverage part components that apply to each (Declarations, Coverage Form, Conditions, Endorsements) any of these can be bought alone as monoline coverage, or in combination of any of the above, making it a CPP

Commercial Property Conditions Form

1. Concealment, misrepresentation or fraud coverage 2. Control of property 3. Insurance under two or more coverages -if more than one coverage under policy can respond to the same loss, the insurer will pay no more than the actual loss 4. legal action against the insurer -within 2 years of loss 5. Liberalization -if insurer adopts any provisions that would broaden coverage during policy period or within 45 days prior to the effective date, the broadened coverage will apply without having to be endorsed on the policy. 6. No benefit to bailee -no person who has custody of covered property, other than the insured, can benefit from the insurance. 7. Other insurance -if insured has other insurance with the same terms, conditions, & provisions, the policy will contribute by limits. -if other insurance is other than that described above, the policy will respond on an excess basis, paying only for the amount of loss in excess of the other insurance 8. Policy period, coverage territory 9. transfer of rights of recovery against others (subrogation) -insured may transfer any rights he or she has to recover damages from another person to the insurer after the insurer makes payment for loss.

Builders Risk Coverage Form & Additional Coverages

1. Debris removal -applies if reported within 180 days of loss or damage, or end of policy period -policy will pay up to 25% of the direct physical loss plus any applicable deductible -if covered property has NOT sustained direct physical loss or damage: up to $5000 for each location. -if direct loss & debris removal expense exceed the limit of insurance, policy will pay an additional sub for debris removal on top of the insurance amount ($25,000) 2. Preservation of property -covered while being moved or stored at another location, provided loss or damage occurs within 30 days AFTER the property is moved. -NOT an additional amount of insurance 3. fire dept. service charge -up to $1000 is included. -deductible does NOT apply 4. Pollutant cleanup & removal -up to $10,000 for expenses incurred to remove pollutants if the discharge is caused by a covered cause of loss reported in writing within 180 days of occurrence. -this is max amount insurer will pay in any 12-month period.

Business Personal Property (BPP) covers the following:

1. Furniture & fixtures that are NOT considered building items -machinery & equipment NOT permanently installed 2. Stock 3. All other personal property owned by the insured & used in the insureds business 4. Labor, materials or services provided or arranged on personal property of others . 5. The use interest of tenant improvements or betterments 6. Leased personal property for which the insured is contractually responsible unless otherwise provided in the next section, personal property of others.

3 Optional coverages available to waive coinsurance for Business Income Coverage

1. Maximum Period of Indemnity co-insurance clause is replaced and the most the insurer will pay for loss of business income is the lesser of the following: -actual amount of loss sustained during the 120 days following loss -OR the limit of insurance 2. Monthly Limit of Indemnity -the most the insurer will pay in each 30-day period after a direct physical loss is the limit of insurance times a specified percentage shown in the declarations 3. Business Income Agreed Value -to activate this coverage, the insured MUST complete a business income report showing the business financial data for the previous 12 months & an estimate for the next 12 months -this report becomes part of the policy -limit selected should be AT LEAST the coinsurance percentage shown in the declarations, multiplied by the net income & extra expenses for the 12 months following the worksheet.

CGL Coverage Form is divided into 6 Sections

1. Section I - Coverages -Coverage A (BI & PD) -Coverage B (Personal & Advertising Injury) -Coverage C (Medical Payments) 2. Section II - Who is an Insured 3. Section III - Limits of insurance 4. Section IV - CGL Conditions 5. Section V - Extended Reporting Periods -ONLY available in "claims-made" form 6. Section VI - Definitions

Legal Liability Coverage Form & Additional Coverages

6 Additional coverages that apply in addition to the limit of insurance which are the same as the supplemental payments. With respect to any clam or suit, the insurer will also pay the following: 1. All expenses they incur 2. the cost of bonds to release attachments 3. all reasonable expenses incurred by the insured at the insurers expense, including up to $250/day for loss of earnings.

Business Personal Property (BPP) does NOT cover the following:

Accounts, bills, currency, money or securities Animals (unless owned by others & boarded, or owned by the insured as "stock" while inside building) Automobiles held for sale Bridges, sidewalks & paved surfaces costs of excavating foundations of buildings, structures, machinery or boilers if their foundations are below the lowest basement floor or the surface of the ground if there is NO basement land personal property while airborne or waterborne piers, wharves, or docks property covered under another coverage form retaining walls NOT apart of the described building Underground pipes or drains cost to research or replace valuable papers or records (a minimal amount of coverage is provided in the coverage extensions) Crops, Fences, trees, shrubs, & plants

Commercial Property Coverage: Special Form (all risk/open peril)

All causes of loss are covered except for those specifically excluded special form has several limitations: -certain types of property will be covered ONLY for a specific amount or are covered only for certain causes of loss insurer will NOT pay for loss or damage to the following types of property unless the loss or damage is caused by one of the specified causes of loss: 1. Animals, but only if they are killed, or their destruction is made necessary 2. Fragile articles, if broken 3. Builders machinery, tools & equipment while away from the described premises.

Occurence

An accident, including continuous or repeated exposure to substantially the same general harmful conditions. coverage exists for covered occurrences: -DURING the policy period -& AFTER the policy period if due to the same circumstances that occurred during the policy period an occurrence must also take place within the coverage territory, as defined in the policy

Commercial Property Coverage has 3 Cause of Loss Forms

Basic Form (Named Peril) Broad Form Special Form

Commercial Property Coverage: Basic Form

Basic Form (Named Peril) covers 11 causes of loss: Fire Lightning Explosion -does NOT include explosion of pressure relief vessels or if caused by swelling of contents or buildings from water Windstorm or hail -plants & shrubs usually excluded Aircraft or Vehicles -no coverage for loss if damage is caused by a vehicle owned or operated by the insured in the course of their business Riot or Civil Commotion -includes acts of striking employees while on the described premises and looting Vandalism -damage resulting from theft is not covered -EXCEPT for the damage caused by breaking in or exiting the premises Sprinkler Leakage -covers discharge or leakage from an automatic fire protective sprinkler system, including collapse of a tank Sinkhole collapse -covers direct loss caused by the sudden sinking or collapse of land created by the action of water on limestone or dolomite -if collapse is into a man-made hole, there is NO coverage -coverage also does NOT include filling the sinkhole volcanic action -covers direct loss from volcanic eruptions if caused by lava, ash, dust or airborne shockwaves -the cost to remove ash or dust that does NOT cause a direct loss is not covered -all volcanic eruptions that occur within any 168-hour period (1 week) are considered one event

Extra Expense (only) Form & Insurance Limits

Co-insurance is NOT applicable in the extra expense form. a limit of insurance is selected by the insured to be used per loss. method of paying the insured for extra expense losses is governed by the limit selected & percentages noted on the declarations for the following time periods: -30 days or less -31 days to 60 days -more than 60 days Each time period will have a percentage. -For ex. an insured chooses $200,000 as a limit for insurance, and the following percentages: 30%, 60%, 100%. in this example, the limit of insurance would be as follows. -30 days or less = $60,000 ($200K * 30% -31 to 60 days = $120,000 -more than 60 days = $200,000 if a covered direct damage loss were to result in an extra expense loss for this insured and the loss lasted for 30 days, the most that could be collected is $60,000. -if the insured incurred $75,000 in extra expenses, only $60K would be paid out. -on the other hand, if they only incurred $50,000 in losses, only that amount would be paid (they have up to $60K that is covered, will only pay out what is needed up to that amount)

Commercial Property Coverage: Broad Form

Contains the same 11 causes of loss as the basic form. in addition, the broad form includes 3 additional perils: 1. Falling Objects 2. Weight of snow, ice, or sleet -EXCEPT for loss or damage to personal property outside of buildings or structures -or for loss or damage to lawns, trees, shrubs or plants which are part of a vegetated roof. 3. Water damage -includes accidental discharge or leakage of water or steam as the direct result of the breaking apart of a plumbing, heating, AC, or other system or appliance. Water damage does NOT include any of the following: -discharge or leakage from an automatic sprinkler system; sump or related equipment -cost to repair defects that caused the water damage -loss or damage caused by continuous or repeated seepage that occurs over a period of at least 14 days -loss or damage caused by freezing unless the insureds do their best to maintain the heat or drains the system and turns off the water supply.

Builders Risk Coverage Form - When Coverage Begins & Ends

Coverage begins on the date construction starts & ceases when one of the following occurs: 1. policy on the construction expires or is cancelled 2. construction is abandoned without any plans to complete it 3. whenever the property is accepted by the purchaser 4. 90 days after construction is completed 5. 60 days after constructed building is occupied or put into its intended use 6. when the insureds interest in the property ceases.

Business Income & Extra Expense Coverage Form

Coverage for indirect losses indirect losses are NOT automatically included in the CPP. -insured must purchase the coverage and select an appropriate limit of insurance. an indirect loss is ONLY payable after a covered direct damage loss. because 3 cause of loss forms exist in the CPP, the perils that trigger indirect coverage will wary. coverage is triggered by a covered loss that leads to a necessary suspension of operation during the period of restoration & at then premises described in the declarations. 3 coverage forms available to the insured: 1. Business Income w/ Extra Expense Coverage 2. Business Income without Extra Expense Coverage 3. Extra Expense Coverage

Extra Expense (Only) Coverage Form Key Points

Damage must be to property listed in the declarations. if damage is to property in the open or in a vehicle, it must be within 100ft of the premises direct loss MUST be from a covered cause of loss (this will vary depending on the cause of loss form selected) extra expenses are those necessary expenses incurred during the period of restoration that would NOT have been incurred had there been no direct damage to the covered property. -also includes costs associated with minimizing the suspension of operations period of restoration has no waiting period so extra expenses can be paid immediately civil authority coverage applies & begins immediately upon an authority prohibiting access to the premises & lasting for 4 weeks expenses to repair or replace property are NOT included $2500 can be extended for losses associated with the interruption of computer operations & the insured needs to resume operations as quikcly as possible or the insurer will have the option to limit the loss payment

Builders Risk Coverage Form

For companies that builds commercial structures. Insures buildings while under construction coverage most often written on a "completed value form" but may be written on a reporting form basis. Coverage increases over time because when building a commercial structure, it's not going to be fully completed until some time. Claims are paid on ACV value, Replacement cost is not available for this form Builders Risk Form Coverage automatically gets terminated when: -the insured's builders interest ceases, -when the property is sold -or 90 days after construction is completed, because this form is for commercial buildings under construction.

Commercial Property Insurance

Insurance that covers commercial buildings and their contents against various types of property loss. can be issued as a monoline policy or as part of a CPP

Debris Removal

Policy will to remove debris of covered property & other property (with some limitations) when associated with a covered loss these expenses MUST be reported to the insurer within 180 days of loss Debris removal is limited to the limit of insurance applicable to the covered property being removed with a sublimit of 25% of the loss policy provides $5000 in coverage for removal of debris if NO covered property is actually damaged if the limit of insurance or the 25% sublimit are NOT adequate, the policy provides an additional $25,000 for removal of covered property.

Legal Liability coverage form Conditons

Several conditions apply to the Commercial Property Conditions: 1. Notify insurer promptly of any accident that may result in a loss 2. immediately send insurer copies of any demands or notices in conjunction with a claim or suit 3. authorizer the insurer to obtain records or other information 4. Cooperate with the insurer in the investigation 5. assist the insurer in enforcing any right against another person 6. do NOT many any settlements or assume any obligations voluntarily. 7. Other insurance -if other insurance applies, insurer will settle on pro-rata basis if the other insurance is written on the same basis. Additional Conditions: 1. Amendments of commercial property conditions none of the commercial property conditions apply to this coverage form except: -concealment, misrepresentation or fraud -insurance under 2 or more coverages -liberalization 2. bankruptcy -if an insured becomes bankrupt, it does NOT relieve the insurer of their obligation under this coverage form. 3. policy period, coverage territory -insurer will pay for loss or damage caused by an accident that occurs during the policy period shown in the Declarations, & within the coverage territory (US, Puerto Ricco, Canada) 4. separation of insureds. -insurance applies to the named insured & each additional insured, except with respects to the limits of insurance

Condominium Association Coverage Form

The following property is covered while located within a unit and without regard to ownership: -Fixtures -improvements -Alterations that are part of the building or structure -Any appliances for refrigerating, ventilating, cooking, dishwashing, laundering, security, or housekeeping -However, this property is covered only if the Condo agreement states that the Associations insurance must cover them. Condos do NOT come in one size or shape. Residential condos can be apartment buildings, multi-unit dwellings, or even single-family dwellings -Commercial condos may house offices, warehouses, or even manufacturing operations -Some condos may include both residential and commercial unit-owners The key is shared ownership of the building and common areas by the individual unit-owners and the condo agreement and bylaws that contractually bind the unit-owners Coverage is provided based on the association agreement and bylaws and property ownership. -Most of a single-unit owners property is NOT eligible for coverage Covers the buildings, permanent fixtures, and facilities. -Does not Cover Personal Property owned by the Condo Unit Owner (instead it would be insured under HO-6)

BPP coverage form & Valuation Exceptions

The insurer will settle the loss on an ACV basis EXCEPT under the following conditions: 1. if limit of insurance satisfies the coinsurance clause & the amount of loss is less than $2500, insurer will pay the cost to repair or replace property 2. Stock sold, but NOT delivered, will be valued based on the selling price -stock-merchandise held in storage for sale, raw materials, & in process or finished goods, including supplies used for packing & shipping 3. Glass will be valued at the cost of replacement with safety glazing material, if required by law 4. Tenant's improvements and betterments will be valued at ACV if repairs are made promptly -if repairs are NOT made promptly, it will be valued as a proportion of the original costs 5. Valuable papers & records will be valued on the cost of blanket material & the labor required to transcribe the records.

Legal Liability Coverage Form: Extensions

This coverage form includes 3 extensions of coverage: 1. Additional Insureds -if the named insured is a partnership or corporation, coverage also applies to the insured's partners, executive officers, trustees, directors & stockholders 2. Newly Acquired Organization -other than partnerships or joint ventures, are also covered, but only for 90 days or until the end of the policy period, whichever is sooner. 3. Newly Acquired Property. -coverage is available for buildings or personal property that comes under the insured's control, care or custody after the beginning of the current policy period. -coverage ends when the policy period expires, 30 days after the property came under the insureds control, or when values are reported to the insurer, whichever happens first.

Special Form - Additional Coverages & Coverage Extensions

additional coverage of collapse and limited coverage for fungus, wet rot, dry rot, & bacteria apply subject to the limitations previously discussed. Coverage extensions include: 1. up to $5000 for property in transit for certain perils 2. cost to tear out and replace part of the building or structure resulting from a loss due to water damage or other liquid discharge from a system or appliances 3. expenses incurred to put up temporary glass plates or board up openings while glass is waiting to be replaced.

Peak season limit of insurance endorsement

adjusts the amount of insurance on business personal property (BPP) to allow for the changes in value because of seasonal increases in stock for instance, some retail businesses will have a much larger inventory on hand prior to winter holidays.

Commercial Property & Broad Form Additional Coverages

broad form includes the following 2 additional coverages: 1. Collapse -will cover collapse of building if loss is result of hidden decay, insect or vermin, weight of people, rain that collects on roof, -& use of defective materials or methods of construction if the collapse occurs during construction Collapse of building does NOT include: -settling, cracking, shrinkage, bulging or expansion. 2. Limited coverage for fungus, wet rot, dry rot & bacteria. -loss as a result of these conditions must bas as a result of a covered cause of loss other than fire -does NOT apply to vegetated roof -may also apply if flood coverage endorsement is attached -sublimit of $15K for these losses

Commercial Package Policy (CPP)

bundle of insurance coverages tailored to the needs of a business owner. (large business) includes both liability & property coverage for businesses & other organizations. coverages available can be written together in a single contract (package policy) OR they can be written separately as single coverage (Monoline)

operations

business activity at the premises described in the declarations

Coverage Extension: Personal Effects & property of others

business personal property (BPP) coverage can be extended up to $2500 for personal effects of the insured or his employees -coverage does NOT apply to theft this coverage can also be applied to personal property of others in the insured's care, custody & control

Condominium Association Coverage Form & Covered Property

business personal property includes property owned by the association or jointly by the unit owners, & leased business personal property that the association has a contractual agreement to insure BPP is insured if in or within 100ft of the described premises. the same cause of loss forms used with the BPP coverage form are used with this coverage form as well. in addition, the same additional coverages & coverage extensions are included in this form as well EXCEPT for one: -Unit owners insurance condition

Spoilage Endorsement

classifies perishable stock as covered property when owned by the insured or when property of others is in the care, custody & control of insured this endorsement extends coverage for the following causes of loss: 1. breakdown of refrigeration, cooling or humidity control equipment when located at the described premises. 2. Contamination by a refrigerant 3. Power outage, on or off the premises, when beyond the control of the insured.

Coverage Extension: Business Personal Property Temporarily in Portable Storage Units

coverage extends to BPP while temporarily stored in a portable storage unit (including a detached trailer) located within 100 feet of the premises maximum amount of coverage is $10,000 & the coverage ends 90 days after the business personal property has been placed in the storage unit

civil authority

coverage will be extended if the insured suffers a business income or extra expense loss because a neighboring property (not more than 1 mile from the described premises) is damaged by a loss covered in the insured's policy and requires a suspension of the insured's operations or a civil authority needs unimpeded access to the damaged property coverage is limited to 4 weeks & am 72-hour waiting period

Ordinance or Law Endorsement

covers a building in the event that the enforcement of any building, zone, or land use law results in loss or damage, any increased cost of repairs or reconstruction, or demolition & removal costs the endorsement is split into 3 different categories, and the insured can purchase all or some of the coverages included. this endorsement can be added ONLY to a property policy written on a replacement cost basis -co insurance does NOT apply building listed in endorsement MUST suffer direct damage to at least part of the structure -only the part of structure covered by a peril in the policy & subject to the ordinance or law will benefit from this endorsement coverage is for completion of minimum requirements as stipulated by the ordinance or law. -no coverage will be provided for ordinances or laws the insured was required to comply with prior to loss. endorsement is split into 3 different categories: 1. Coverage A - Loss to the undamaged portion of the building-loss in value to the undamaged portion of the building 2. Coverage B - demolition cost of the undamaged portion of the covered building 3. Coverage C - increased cost of construction for the damaged & undamaged portions of the building

Business Personal Property (BPP) Coverage

covers business personal property located in or on the building or structure described in the declarations -also covers personal property in the open, within 100 feet of the building or structure OR within 100 feet of the premises, whichever is greater.

Extra Expense (Only) Coverage Form

covers consequential losses, and may be used by a business that will most likely NOT have a business income loss ONLY pays for expenses that are over and above normal business expenses. -EX. monthly expenses are $5000 a month.-however, a fire occurs causing you to temporarily move your business to a new location where monthly expenses are now $6000 -the extra expense policy will only give you $1000 a month -this is because it only covers expenses that are OVER and above normal business operations, -thus, it will only cover expenses that are greater than $5000 a month May also be added to a CPP, or it can be combined with the Business Income Coverage Form NO deductible General rule is that if a business must shut down due to a loss, it needs Business Income Coverage -However, if the business must continue to operate after a loss it needs the Extra Expense Coverage

Personal Property of Others

covers personal property of others that is in the care, custody or control of the insured, if located in or on the building described in the declarations, or in the open within 100 feet of the building or structure, or 100 feet of the premises, whichever is greater.

Legal Liability Coverage Form

covers property in the insureds care, custody or control for which the insured is legally liable for damage

Bodily injury

defined as BI, sickness, or diseased sustained by a person to include resulting death from any of these at any time

Coinsurance Clause

defines how much will be paid in the event the insurance limits do NOT meet the policy coinsurance requirement

Interline Endorsement

designed to eliminate duplicate language and minimize the number of endorsements required. Interline endorsements effectively coordinate the coverage provided in one coverage part of the policy to other coverage parts to prevent redundancy.

cause of loss form

establishes & defines the cause of loss (or perils) for which coverage is provided 3 Causes of loss Forms: -Basic -Broad -Special

Extra Expenses

expenses incurred by the insured, above their normal operation costs, during the period of restoration and to minimize the suspension.

Special Form - Limits for certain types of property

for any loss or damage caused by theft, the following types of property are covered ONLY for the following limits that are not in addition to the limits of insurance: 1. $2500 for: -furs & fur garments -Jewelry (unless worth less than $100) -watches -precious & semiprecious stones -bullion, gold, silver & other precious metals -patterns and dyes 2. $250 for: -stamps -tickets (including lottery tickets held for sale) -letters of credit

BPP Coverage Form & Vacancy

if building has been vacant >60 days before loss, insurer will NOT pay for damage caused by: -vandalism, -sprinkler leakage, -glass breakage, -water damage, -theft, -or attempted theft. if the loss is caused by any other peril, the insurer will reduce the amount it otherwise would have paid by 15%. Note: if a Vacancy Permit Endorsement is added to a BPP coverage form, vacancy condition under the basic policy will be waived during this period.

fire department service charge

if insured is under obligation to pay for fire department service calls, the policy will reimburse the insured for up to $1000 for this charge. policyowner may purchase a higher amount as shown on the declarations page. deductible does NOT apply to this additional coverage

Mortgageholders condition

if insurer denies coverage because the insured failed to comply with the policy provisions, the mortgage holder may still be able to receive payment if the mortgage holder: -pays any premium due under the policy -submits a signed proof of loss within 60 days -and has notified the insurer of any changes in ownership or occupancy if insurer cancels coverage for nonpayment of premium, it will provide the mortgage holder a written notice of the cancellation -10 days if for nonpayment of premium -30 days for all other reasons.

BPP Coverage Form & Loss Payment

in the event of loss or damage, the insurance company has option to: 1. Pay Value of lost or damaged property 2. pay cost of repairing or replacing the lost or damaged property 3. take all or any part of the property at an agreed or appraised value 4. Repair, Rebuild, or replace the property with other property of like kind & quality. 5. give notice of their intentions within 30 days after receiving the sworn proof of loss, and then pay the covered loss within 30 days after they determine to pay the claim.

Value Reporting Form

insurance form a company with irregular inventory completes in order to receive insurance coverage in variable amounts someone businesses hold inventories that fluctuate throughout the year for reasons of supply & demand, seasonal factors & consumer needs using this form, the business reports the quantity & value amounts of their inventory to their insurance company. by submitting this form on a regular basis, the company can avoid the extra costs & risks associated with being over insured or underinsured.

Agreed value

insurer and insured will determine a value for property insurer will pay NO more for loss or damage to that property than the proportion the insurance limit for this coverage bears to the agreed value shown. Agreed value coverage will protect you from a coinsurance penalty ONLY if you have fulfilled certain requirements. co-insurance does NOT apply to property with an agreed value

Special Form covers the following specified causes of loss

leakage from fire-extinguishing equipment sinkhole collapse falling objects volcanic action water damage (accidental discharge or leakage of water or steam from an appliance.)

Commercial General Liability (CGL)

liability for your business's -covers BI and PD to others caused by negligent acts of the business cost of defense is in addition to limits does NOT cover personal liability generally has NO deductible can be written for almost any type of business Some businesses, such as auto dealers and repair shops, have a special type of Liability coverage known as Garage Liability

Basic Form (named peril) includes 1 Additional coverage

limited coverage for fungus, wet rot, dry rot and bacteria loss as a result of these items must be as a result of a covered cause of loss other than fire. coverage does NOT apply to lawns, trees, shrubs, or plants which are part of a vegetated roof. coverage may also apply if the flood coverage endorsement is attached there is a sublimit of $15K for these losses to include removal, testing & tearing out & replacing any parts of the property to gain access. this is NOT additional insurance

inflation guard

limits of insurance to which the coverage applies are automatically increased by an annual percentage shown in the declarations, and prorated over the policy term

Building & Personal Property Coverage Form

main CPP form thats used to cover: -buildings -business personal property -& property of others this is a direct damage form -gives insured an option to select a "cause of loss form" the insured must elect the limits needed for coverage: -unlike HO & DPs, no percentage of building coverages, such as other structures or personal property,. are automatically included. -if insured wants a particular building covered, it needs to be listed in the declarations with an appropriate limit of insurance. -the same applies to business personal property (if no limits are shown, no coverage exists.)

Business Income Coverage Form (Business Interruption)

may also be referred to as "time element coverage" or "Business Interruption Coverage" May also be added to a CPP. this applies to losses and expenses related to an interruption of normal business operations at the premises described in the declarations Both the Commercial Building and Personal Property Form and the Builders Risk Form involve coverage for direct losses, in which a covered peril actually damages the insured property However, perils that cause direct damage can also cause consequential (indirect) losses, sometimes called time element losses Time element loss means the amount of the loss is directly linked to the time it takes to repair or rebuild the damaged property -However, indirect losses (time element) are not covered unless the peril causing the direct loss is covered first Only losses incurred during a period of restoration are covered. -The period of restoration begins on the date that the direct physical loss occurred, and ends on the date that the damaged property should be repaired, rebuilt, or replaced by the insurance company.' Business Income Coverage pays the actual loss of business income, which is defined as -net profit or loss before taxes PLUS continuing operating expenses Net Profit or loss (before taxes) + Continuing normal operating expenses to include payroll = Business Income Purpose of the coverage is to restore the insured to the position that would have existed had there been no disruption of operations Care must be taken when writing this coverage to make sure that the policy limits are adequate to cover the insured if the loss comes at the worst possible time

Basic Form Exclusions

ordinance or law earth movement nuclear hazard war and military fungus, wet rot, dry rot, & bacteria (very limited coverage) govt actions artificially generated electrical current rupture or bursting of water pipes, unless it resulted from another covered cause of loss leakage or discharge of water or steam explosion of steam boilers, steam pipes, or steam engines owned or operated by an insured mechanical breakdown neglect utility services

increased cost of construction

policy will pay the lesser of $10,000 or 5% of the insurance limit applicable to the building for increased cost of construction resulting from building laws enforcement. this is considered "additional insurance" and only applies when the insured has selected the replacement cost option for a building insured

pollutant cleanup & removal

policy will pay up to $10,000 for expenses incurred to remove pollutants if the discharge is caused by a covered peril and reported in writing within 180 days of occurrence. this is the maximum amount the insurer will pay in any 12-month period. expenses to monitor or assess the existence of pollutants are NOT covered -however, testing costs will be included as long as they are associated with the covered removal of contaminants.

Builders Risk Coverage Form Covered/ NOT Covered Properties

property covered under this form includes: -foundations -fixtures -machinery -equipment -materials -and supplies within 100 feet of premises if intended to become a permanent part of building. Property NOT covered includes: -land or water -outdoor lawns -trees -shrubs or plants -radio -TV antennas -satellite dishes -& signs (unless attached to the building, then limit of coverage is $2500/sign for any 1 occurrence) the same covered causes of loss forms used with the BPP coverage form applies to the builders risk coverage form as well

Coverage Extension: Newly Acquired or Constructed Property

provides coverage for 30 days for newly acquired buildings & personal property that are similar in use to the property insured will pay up to $250,000 for newly acquired buildings & up to $100,000 for business personal property

Condominium Commercial Unit-Owners Coverage Form

provides coverage for business personal property of the insured this insures COMMERCIAL condo unit owners, NOT residential condo unit owners (they're covered under HO & DPs) It does NOT cover the building, and it's only used for commercial condos, such as various types of businesses or retail shops. this form is ALWAYS used on an excess basis over the condo association coverage form when the dealing with the same insured property -meaning, this form will NOT pay out unless the condo association policy limit is first exhausted there is no Mortgage Holder Additional Conditions.

electronic data

provides coverage for the replacement of electronic data for certain types of losses coverage will vary based on the cause of loss form selected policy may pay up to $2500 in any one policy year, but the coverage can be increased coverage is granted for a virus or harmful code that damages data with limitations for employees or contractors hired by the insured to work on their computer system

replacement cost

the ACV in the valuation condition is replaced with RC valuation this coverage does NOT apply to: -personal property of others -contents of a residence -works of arts -antiques or rare articles -or stock (unless stock is shown in declarations)

Additional Coverages

the BPP Coverage form includes the following additional coverages: 1. Debris Removal 2. Preservation of Property 3. Fire Department Service Charge 4. Pollutant cleanup & removal 5. Increased cost of construction 6. Electronic Data

Preservation of Property

the policy will pay for any damage to property moved to protect it from further damage, but only for 30 days after the property is first moved.

suspension

the slowdown or cessation (temp halt) of the insureds business activities

Business Personal Property (BPP) Coverage Form Extensions

this form also includes several coverage extensions that apply to property located in, or on a described building, or in the open, or in a vehicle within 100feet of the described premises. the most an insurer is obligated to pay is the limit of insurance specified in the policy declarations, minus any applicable deductible. deductible applies only ONCE per occurrence, regardless of the # of different properties involved. the following types of property can be covered if the policy has an 80% or more coinsurance percentage or a value reporting period: 1. Newly Acquired or Constructed Property 2. Personal Effects & property of others 3. Valuable Papers and records 4. Property OFF premises 5. Outdoor property 6. Nonowned dethatched trailers 7. Business Personal Property Temporarily in Portable Storage Units

Legal Liability Coverage Form & Cause of loss form

this form also requires a cause of loss form. the same cause of loss forms that apply to the building & personal property coverage form apply to this coverage. coverage varies depending on which form is selected (basic, broad, & special)

Value reporting form

this is the usual method of determining premiums & amount of coverage on those properties insured for fluctuating values at the reporting period, the insured reports the values at risk & pays premiums for that period based upon the report. -report period can either be daily, weekly, monthly, quarterly, or policy period, whichever is specified in the contract. the value reporting form allows the amount of coverage to float with the changing values -premiums are adjusted at the end of policy period based on the average values reported the policy limit must be the maximum value expected during the policy period. -in the beginning of policy period, a provisional (or advance premium) is typically paid, typically based on 75% of policy limit. -during the policy period, the insured is required to file reports as to actual values for specified periods of time -at end of policy period, the premium is adjusted as if the average value was held everyday of the policy period it is important the reports be kept current as required. -should a loss occur on a day when the reports are NOT current as required, the maximum payable will be whatever the last report said -if the reports are current, the policy will pay what the insured can prove was lost, up to the policy limit -should a loss occur before the first report is due, up to the full amount of insurance applies -if first report has NOT been submitted as required when a loss occurs, the insurer will pay no more than 75% of the amount it would otherwise pay. if values have been underreported, the insurer will NOT pay a greater portion of a loss than the amount reported divided by the actual value on the report due date -for ex. if the insured reports $50K and the actual value is $75K, only about 67% of the loss value has been reported, so only 2/3s (approximately 67%) of the loss will be covered

Coverage Extension: Property off Premises

up to $10,000 for property, excluding stock, that is temporarily at premises the insured does NOT own, lease, or operate while at a trade show, fair, or exhibition it will also provide coverage at a storage location the insured leases, but ONLY if the lease was executed after the effective date of the current policy term. coverage does NOT apply to personal property in a vehicle, or in the possession of a salesperson.

Legal Liability Coverage Form & Covered Properties

used to insure tangible property of others in the insured's care, custody or control. it covers the insured's legal liability for loss or damage to property of others, including "loss of use" the covered property must be specifically described in the declarations & the limit of insurance is the MOST the insurer will pay for any loss. policy will also pay for defense costs of the insured associated with a covered loss. -there is no duty to defend the insured if the insurance does NOT apply.