Table of Contents. Underwriting Property Risks...4 The National Underwriter Company Coverage Guides...6

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1 Table of Contents Introduction: The Building and Personal Property Coverage Form, CP ISO Building and Personal Property Coverage Form, CP Property Coverage Forms...3 ISO Rules...3 Underwriting Property Risks...4 The National Underwriter Company Coverage Guides...6 Chapter 1: The Insuring Agreement: Covered and Not Covered Property...7 Section A. Coverage... 7 Section A.1. Covered Property Section A.2. Property Not Covered Chapter 2: Additional Coverages, Coverage Extensions, and Optional Coverages...43 Additional Coverages...43 Section 4. Additional Coverages...43 Section 5. Coverage Extensions Optional Coverages...64 Chapter 3: Covered Causes of Loss Named Perils Forms CP Causes of Loss Basic Form...73 CP Broad Form Causes of Loss...87 Exclusions That Apply to Both Named Perils Causes of Loss Forms...90 Subsection B.2. Exclusions...99 Special Exclusions Additional Coverages Chapter 4: Special Causes of Loss Form (CP 10 30) Similarities to Named Perils Forms Fortuity Doctrine Open Perils Exclusions Section B Section 2.d.(1) to (7) Exclusions Other Exclusions Concurrent Causation Exclusions Special Exclusions Limitations vii

2 Additional Coverages and Limitation Additional Coverage Extensions Chapter 5: Conditions Commercial Property General Conditions Commercial Property Policy Conditions Other Relevant Provisions of the Building and Personal Property Coverage Form Loss Conditions The Insured s Duties in the Event of Loss Actual Cash Value Defined Valuing Business Personal Property Recovered Property Vacancy Valuation Additional Conditions Chapter 6: Builders Risk ISO Eligibility and Rules Covered Property Property Not Covered Covered Causes of Loss Additional Coverages Coverage Extensions Limits of Insurance Deductible Loss Conditions Additional Conditions Builders Risk Coverage Options Building Renovations Builders Risk Reporting Form Separate or Subcontractors Interest Collapse During Construction Theft of Building Materials, Fixtures, Machinery, Equipment Building Materials and Supplies of Others Who Can Be Covered Limited Usage Chapter 7: Business Income Coverage Forms Coverage for Business Income When Coverage Applies Extra Expense viii

3 Extended Loss after Operations Resume Blanket Coverage ISO Simplified Business Income Program Extra Expense Covered Causes of Loss Exclusions and Limitations Additional Limitation Additional Coverages Civil Authority Alterations and New Buildings Extended Business Income Interruption of Computer Operations Expense to Reduce Loss Coverage Extension Limits of Insurance Loss Conditions Loss Determination Other Loss Conditions Coinsurance Optional Coverages Maximum Period of Indemnity Monthly Limit of Indemnity Agreed Value Extended Period of Indemnity Extra Expense Insurance Insured May Need Both Extra Expense Coverage Form, CP Causes of Loss Additional Limitation Interruption of Computer Operations Coverage Extension and Additions Limits Other Insurance Other Exposures Ingress and Egress Flood Absence of Profits Chapter 8: Leasehold Interest Coverage Form, CP Chapter 9: Mortgageholders Errors and Omissions Coverage Form, CP The Four Coverage Agreements Exclusions ix

4 Limits of Insurance Additional Coverage Collapse Additional Coverage Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria Additional Conditions Conditions Applicable to All Coverages Definitions Chapter 10: Tobacco Sales Warehouses Coverage Form, CP Chapter 11: Condominium Association Coverage Form, CP 00 17, and Commercial Condominium Unit-Owners Coverage Form, CP Condominium Association Coverage Form, CP Commercial Condominium Unit-Owners Coverage Form, CP Chapter 12: Legal Liability Coverage Form, CP Coverage Coverage Extensions Additional Insureds and Newly Acquired Organizations Newly Acquired Property Causes of Loss and Exclusions Loss Conditions Additional Conditions Chapter 13: Commercial Property Endorsements Additional Building Property, CP Additional Covered Property, CP Additional Exclusions, CP Additional Insured Building Owner, CP Additional Locations Special Coinsurance Provisions, CP Additional Property Not Covered, CP Agricultural Products Storage, CP Alcoholic Beverages Tax Exclusion, CP Brands And Labels, CP Broken Or Cracked Glass Exclusion Form, CP Builders Risk Theft Of Building Materials, Fixtures, Machinery, Equipment, CP Building Glass Tenant s Policy, CP x

5 Burglary And Robbery Protective Safeguards, CP Business Income Changes Beginning Of The Period Of Restoration, CP Business Income Changes Educational Institutions, CP Business Income From Dependent Properties Broad Form, CP Business Income From Dependent Properties Limited Form, CP Business Income From Dependent Properties Limited International Coverage, CP Business Income Landlord As Additional Insured (Rental Value), CP Business Personal Property Limited International Coverage, CP Cap on Losses From Certified Acts Of Terrorism, IL Changes Electronic Data, CP Civil Authority Change(s), CP Condominium Commercial Unit-Owners Changes Standard Property Policy, CP Condominium Commercial Unit-Owners Optional Coverages, CP Contributing Insurance, CP Debris Removal Additional Insurance, CP Deductibles By Location, CP Deductible Limitation, CP Discharge From Sewer, Drain Or Sump (Not Flood- Related), CP Disclosure Pursuant To Terrorism Risk Insurance Act, IL Discretionary Payroll Expense, CP Distilled Spirits And Wines Market Value, CP Earthquake And Volcanic Eruption Endorsement Form, CP 10 40, and Earthquake And Volcanic Eruption Endorsement (Sub-Limit Form), CP Earthquake Inception Extension, CP Electrical Apparatus, CP Electronic Commerce (E-Commerce), CP Equipment Breakdown Cause Of Loss, CP Exclusion Of Loss Due To By-Products Of Production Or Processing Operations (Rental Properties), CP Extra Expense From Dependent Properties, CP Extra Expense From Dependent Properties Limited International Coverage, CP xi

6 Flood Coverage Endorsement, CP Flood Coverage Schedule, CP DS Food Contamination (Business Interruption And Extra Expense), CP Functional Building Valuation, CP Functional Personal Property Valuation (Other Than Stock), CP Grain Properties Explosion Limitation, CP Higher Limits, CP Household Personal Property Coverage, CP Increase In Rebuilding Expenses Following Disaster (Additional Expense Coverage On Annual Aggregate Basis), CP Increased Cost Of Loss And Related Expenses For Green Upgrades, CP Leased Property, CP Legal Liability Coverage Schedule, CP DS Limitation On Loss Settlement Blanket Insurance (Margin Clause), CP Limitations On Coverage For Roof Surfacing, CP Limitations On Fungus, Wet Rot, Dry Rot And Bacteria, CP Loss Payable Provisions, CP Manufacturers Consequential Loss Assumption, CP Manufacturer s Selling Price (Finished Stock Only), CP Market Value Stock, CP Molten Material, CP Multiple Deductible, CP Multiple Location/Premium And Dispersion Credit Application, CP Newly Acquired Or Constructed Property Increased Limit, CP Off-premises Interruption Of Business Vehicles And Mobile Equipment, CP Ordinance Or Law Coverage, CP Ordinance Or Law Increased Period Of Restoration, CP Outdoor Trees, Shrubs And Plants, CP Outdoor Signs, CP Payroll Limitation Or Exclusion, CP Peak Season Limit Of Insurance, CP Pier And Wharf Additional Covered Causes of Loss, CP xii

7 Pollutant Cleanup And Removal Additional Aggregate Limit Of Insurance, CP Property In Process Of Manufacturing By Others Limited International Coverage, CP Protective Safeguards, CP Radio Or Television Antennas, CP Radioactive Contamination, CP Report Of Values, CP 13 60, and Supplemental Report Of Values, CP Specified Business Personal Property Temporarily Away From Premises, CP Spoilage Coverage, CP Sprinkler Leakage Earthquake Extension, CP Sprinkler Leakage Exclusion, CP Storage Or Repairs Limited Liability, CP Suspension Or Reinstatement Of Coverage For Loss Caused By Breakdown Of Certain Equipment, CP Tentative Rate, CP Terrorism Endorsements Theft Exclusion, CP Theft Of Building Materials And Supplies (Other Than Builders Risk), CP Utility Services Direct Damage, CP Utility Services Time Element, CP Vacancy Changes, CP Vacancy Permit, CP Value Reporting Form, CP Vandalism Exclusion, CP Water Exclusion Endorsement, CP Watercraft Exclusion, CP Windstorm Or Hail Exclusion, CP Windstorm Or Hail Exclusion Direct Damage, CP Windstorm Or Hail Percentage Deductible, CP Your Business Personal Property Separation Of Coverage, CP Chapter 14: The Commercial Properties Program of American Association of Insurance Services (AAIS) Building and Personal Property Coverage Part Supplemental Coverages Special Perils Part Other Coverage Parts Endorsements xiii

8 Chapter 15: The Mutual Service Office Commercial Property Program General Property Form, MCP Insuring Agreement Part I A Main Property Coverages Part I B Supplemental Coverages Part I C Cause of Loss Options Part I D Property Exclusions/Limitations Part I E Property Loss Limitations Part I F Losses Not Insured Part I G Special Part I Conditions Part I H Glossary Part I Common Conditions Part I Common Exclusions Endorsements Preprinted in the MSO General Property Form Chapter 16: E-Issues under the Building and Personal Property Coverage Form Cyberspace What Is It? Intangible Property Insuring Intangible Assets The Meaning of Property E-Property Policies Chapter 17: Miscellaneous Commercial Property Coverage Issues ISO Interline Terrorism Endorsements Catastrophic Weather Loss Claims Issues Wind, Water, and Wind-Driven Water Wind Percentage Deductible Chinese Drywall Green Building Coverage Issues Marijuana Manufacturing/Distribution Income Disruption Insurance Specimen Forms Building and Personal Property Coverage Form, CP Condominium Association Coverage Form, CP Condominium Commercial Unit-Owners Coverage Form, CP Builders Risk Coverage Form, CP xiv

9 Business Income (and Extra Expense) Coverage Form, CP Legal Liability Coverage Form, CP Leasehold Interest Coverage Form, CP Mortgageholders Errors and Omissions Coverage Form, CP Tobacco Sales Warehouses Coverage Form, CP Commercial Property Conditions, CP Causes of Loss Basic Form, CP Causes of Loss Broad Form, CP Causes of Loss Special Form, CP Common Policy Conditions, IL Building and Personal Property Coverage Part, AAIS CP General Property Form, MCP Index xv