Table of Contents. Introduction: The Building and Personal Property Coverage Form CP

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1 Table of Contents Introduction: The Building and Personal Property Coverage Form CP Property Coverage Forms...3 ISO Rules...3 Underwriting Property Risks...5 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...10 Section A.2. Property Not Covered...30 Chapter 2: Additional Coverages, Coverage Extensions, and Optional Coverages...39 Section 4. Additional Coverages...39 Section 5. Coverage Extensions...48 Optional Coverages...58 Chapter 3: Covered Causes of Loss Named Perils Forms...65 CP Causes of Loss Basic Form...66 CP Broad Form Causes of Loss...77 Exclusions That Apply to Both Named Perils Causes of Loss Forms...81 Subsection B.2. Exclusions...89 Special Exclusions...91 Additional Coverages...91 Chapter 4: Special Covered Causes of Loss Form (CP 10 30)...97 Similarities to Named Perils Forms...99 Fortuity Doctrine Open Perils Exclusions Section B xi

2 Losses That Happen over Time Section 2.d.(1) to (7) Other Exclusions Concurrent Causation Exclusions Special Exclusions Limitations Additional Coverages and Limitation Additional Coverage Extensions Chapter 5: Conditions Commercial Property General Conditions Cancellation Changes Examination of Your Books and Records Inspection and Surveys Premiums Transfer of Rights and Duties under This Policy Commercial Property Policy Conditions Concealment, Misrepresentation, or Fraud Control of Property Tracing the History Insurance under Two or More Coverages Legal Action against Us Liberalization No Benefit to Bailee Other Insurance Policy Period, Coverage Territory Transfer of Rights of Recovery against Others to Us Other Relevant Provisions of the Commercial Property Policy Limits of Insurance Deductible Loss Conditions Abandonment and Appraisal The Insured s Duties in the Event of Loss Loss Payment Actual Cash Value Defined Valuing Business Personal Property Recovered Property Vacancy Valuation xii

3 Additional Conditions Coinsurance Mortgageholders Chapter 6: Builders Risk ISO Eligibility and Rules Covered Property Property Not Covered Covered Causes of Loss Additional Coverages Coverage Extensions Sod, Trees, Shrubs, and Plants 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 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 xiii

4 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: Other Coverage Forms Leasehold Interest Coverage Form, CP Mortgageholders Errors and Omissions Coverage Form, CP Tobacco Sales Warehouses Coverage Form, CP Condominium Associations Coverage Form, CP Commercial Condominium Unit-Owners Coverage Form, CP Legal Liability Coverage Form, CP Additional Conditions xiv

5 Chapter 9: Commercial Property Endorsements Additional Building Property, CP Additional Covered Property, CP Additional Exclusions, CP Additional Insured and Loss Payee (Building Owner) CP Additional Locations Special Coinsurance Provisions, CP Additional Property Not Covered, CP Agricultural Products Storage, CP Alcoholic Beverage 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 Under Tenant s Policy, CP Burglary and Robbery Protective Safeguards, CP Business Income Changes Beginning of the Period of Restoration, 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 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 Deductible Limitation, CP xv

6 Discharge from Sewer, Drain, or Sump (Not Flood-Related), CP Disclosure Pursuant to Terrorism Risk Insurance Act, IL Discretionaly Payroll Expense, CP Distilled Spirits and Wines Market Value, CP Earthquake and Volcanic Eruption Endorsement Form, CP 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 Productions or Processing Operations (Rental Properties), CP Extra Expense from Dependent Properties, CP Extra Expense from Dependent Properties Limited Interational Coverage, CP 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 Highter Limits, CP Household Personal Property Coverage, CP Increased Cost of Loss and Related Expenses for Green Upgrades, CP Increase in Rebuilding Expenses Following Disaster, CP Leased Property, CP Legal Liability Coverage Schedule, CP DS Limitation of Loss Settlement Blanket Insurance (Margin Clause), CP Limitations on Coverage for Roff Surfacing, CP Limitations of Fungus, Wet Rot, Dry Rot and Bacteria, CP Loss Payable Provisions, CP xvi

7 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 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 Pollutant Cleanup and Removal Additional Aggregate Limit of Insurance, 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 Rates, 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 xvii

8 Vacancy Changes, CP Vacancy Permit, CP Value Reporting Form, CP Vandalism Exclusion, CP Water Exclusion, 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 10: The Commercial Properties Program of American Association of Insurance Services (AAIS) Building and Personal Property Coverage Part Supplemental Coverages Special Causes of Loss Form Other Coverage Parts Endorsements Chapter 11: E-issues under the Commercial Property Policy Cyberspace What Is It? Intangible Property Insuring Intangible Assets The Meaning of Property E-Property Policies Chapter 12: Miscellaneous Commercial Property Coverage Issues ISO Interline Terrorism Endorsements Catastrophic Weather Loss Claims Issues Wind, Water, and Wind-Driven Water Wind Percentage Deductible Named Windstorms Deductible Endorsement Chinese Drywall Commentary Green Building Coverage Issues xviii

9 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 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 Index xix