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Form BP 00 03 01 10

Summary: The BP 00 03 01 10 form incorporates special perils coverage for property, liability coverage, and policy conditions. Coverage may be changed to named perils by attaching endorsement BP 10 09 01 10 , Named Perils. The businessowners conditions and liability coverage are discussed in a different section. See Businessowners Program for a discussion of eligibility and the general conditions, and see Businessowners Liability Coverage .

The following discussion focuses on the conditions and definitions applicable to the property coverages. Remember that not all insurers immediately adopt new ISO forms; many use earlier editions. Therefore, check carefully in making any coverage determinations.

Topics covered:

Limits of insurance DeductiblesProperty loss conditions Loss payment conditions Additional loss conditions Property general conditions Property definitions

Limits of Insurance

C. Limits Of Insurance

1.The most we will pay for loss or damage in any one occurrence is the applicable Limits of Insurance of Section I – Property shown in the Declarations.

2.The most we will pay for loss of or damage to outdoor signs attached to buildings is $1,000 per sign in any one occurrence.

3.The amounts of insurance applicable to the Coverage Extensions and the following Additional Coverages apply in accordance with the terms of such coverages and are in addition to the Limits of Insurance of Section I – Property:

a.Fire Department Service Charge;

b.Pollutant Clean-up And Removal;

c.Increased Cost Of Construction;

d.Business Income From Dependent Properties;

e.Electronic Data; and

f.Interruption Of Computer Operations.

4.Building Limit – Automatic Increase

a.In accordance with Paragraph C.4.b., the Limit of Insurance for Buildings will automatically increase by 8%, unless a different percentage of annual increase is shown in the Declarations.

b.The amount of increase is calculated as follows:

(1)Multiply the Building limit that applied on the most recent of the policy inception date, the policy anniversary date, or any other policy change amending the Building limit by:

(a)The percentage of annual increase shown in the Declarations, expressed as a decimal (example: 7% is .07); or

(b).08, if no percentage of annual increase is shown in the Declarations; and

(2)Multiply the number calculated in accordance with b.(1) by the number of days since the beginning of the current policy year, or the effective date of the most recent policy change amending the Building limit, divided by 365.

Example:

If: The applicable Building limit is $100,000. The annual percentage increase is 8 percent. The number of days since the beginning of the policy year (or last policy change) is 146.

The amount of increase is

$100,000 x .08 x 146 divided by 365 = $3,200.

5.Business Personal Property Limit – Seasonal Increase

a.Subject to Paragraph 5.b, the Limit of Insurance for Business Personal Property is automatically increased by:

(1)The Business Personal Property – Seasonal Increase percentage shown in the Declarations; or

(2)25% if no Business Personal Property – Seasonal Increase percentage is shown in the Declarations;

to provide for seasonal variances.

b.The increase described in Paragraph 5.a.will apply only if the Limit of Insurance shown for Business Personal Property in the Declarations is at least 100 percent of your average monthly values during the lesser of:

(1)The twelve months immediately preceding the date the loss or damage occurs; or

(2)The period of time you have been in business as of the date the loss or damage occurs.

Analysis

This portion of the policy makes it clear that the limits of coverage applicable to the coverage extensions are additional amounts of insurance. The fire department service charge, pollutant clean-up and removal, increased cost of construction, business income from dependent properties, electronic data, and interruption of computer operations additional coverages also are in addition to, and not included in, the limits of insurance. However, the additional coverage for debris removal is capped by the limit of insurance, except for an additional $10,000 per location that may be paid if the total of direct property loss and debris removal costs exceed the limit of insurance or if the debris removal expense is more than 25 percent of the sum of the deductible plus the amount paid for the direct physical loss.

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