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ISO Commercial Property Program

February 2009

Summary: Under the commercial property program of simplified forms and endorsements developed by Insurance Services Office (ISO), a building and personal property coverage form (CP 00 10 06 07 ) combined with one or more causes of loss forms (discussed elsewhere in this section) and a set of common policy conditions and commercial property conditions (see Common Policy Conditions and see Commercial Property Conditions ) provide a complete portfolio of property coverage for commercial risks. Eligibility for use of the building and personal property coverage form extends to all types of commercial property except those classified as builder’s risk or condominiums. Insuring the property exposures of these risks is handled by means of separate coverage parts under the commercial property program; these policies are detailed elsewhere in this section.

In an attempt to reduce the number of necessary attachments, popular endorsements for inflation guard, agreed value, and replacement cost coverages are incorporated as optional coverages into the basic building and personal property coverage form. When an option is purchased, coverage is signaled by a declarations entry. Careful scrutiny of the limits and denotations of coverage in the declarations is necessary with this style of policy construction, since a cursory reading of the policy or an entry error on the declarations could show coverage where none applies.

Topics covered:

Insuring agreement

Covered propertybuildings

Covered propertybusiness personal property

Covered propertypersonal property of others

Property not covered

Covered causes of loss

Additional coverages

Debris removal

Preservation of property

Fire department service charge

Pollutant clean up and removal

Increased cost of construction

Electronic data

Coverage extensions

Personal effects and property of others

Valuable papers and records (other than electronic data)

Property off premises

Outdoor property

Nonowned detached trailers

Exclusions and limitations

Limits of insurance

Deductible

Loss conditions

Additional conditions

Optional coverages

Definitions

Insuring Agreement

A.Coverage

We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.

Analysis

The building and personal property form’s insuring agreement pledges to pay for direct loss or damage to “covered property” (buildings, business personal property, and personal property of others). The designation of what is a covered peril is the function of a separate causes of loss form, which is available in basic, broad, and special versions.

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ICLC Staff Writer

 

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