Transcript Commercial Property Insurance Chapter 10 Business Property Insurance Appendix C Building and Personal Property Coverage Form.

Commercial Property Insurance
Chapter 10
Business Property Insurance
Appendix C
Building and Personal Property
Coverage Form
Property Risk Management
Property loss - any loss that a person or organization
sustains as a result of the damaging, destruction,
taking or loss of use of property in which that
person or organization has a financial interest
Risk Management Process
1 - Identify and analyze loss exposures
2 - Examine the feasibility of alternative risk
management techniques
3 - Select the best risk management technique
4 - Implement the technique
5 - Monitor the program
Identify and Analyze Loss Exposures
Property Loss Exposures
1 - The item exposed to loss
Real property
Personal property
Valuable information
2 - The cause of loss – anything that could
cause a loss to property
3 - The effects of loss
Reduction in value
Increased cost to repair or replace
Loss of revenue
Extra expense
Direct loss and indirect loss
Overview of Commercial Property
Insurance
Insurance Advisory Organizations
Insurance Services Office (ISO)
American Association of Insurance Services (AAIS)
Develop and file with state insurance departments:
Policy forms
Manual rules
Loss costs
ISO Commercial Lines Program
(1986)
“Commercial property”
Building and contents (on or within 100’ of insured location)
Boiler and machinery
Commercial crime
Employee dishonesty, forgery, theft, burglary, robbery, extortion
Commercial inland marine
Elements of transportation or communication
Property in transit, mobile equipment, property being installed by
a contractor, bridges, radio towers
Farm
Commercial auto and liability
Building and Personal Property Coverage
Covered Property
Building - Table 10-1
Your business personal property – Table 10-2
Property owned by the insured
Furniture and fixtures
Machinery and equipment
“Stock”
All other personal property owned by you and used in your
business
Property owned by others
Labor, materials or services furnished on property of others
Improvements and betterments
Leased personal property
Personal property of others
$2500 for property in the care, custody or control of insured
Property Not Covered under BPP
Table 10-3
Buildings and other real property
Land
Water
Bridges
Roadways
Retaining walls
Piers
Plants and outdoor property
Growing crops and lawns
Outdoor crops
Outdoor trees, shrubs and plants
Outdoor fences
Outdoor signs, unless attached to buildings
Property Not Covered - continued
Other personal property
Deeds
Evidence of debt
Money
Currency
Accounts
Bills
Securities and notes
Also, food stamps
Vehicles, Watercraft, Aircraft
Animals
Valuable papers and records
Property otherwise covered (BPP is excess)
Contraband
Building and Personal Property Coverage
Covered locations
Described locations and off premises
Additional coverages – Table 10-4
Debris removal
Pollutant cleanup and removal
Preservation of property
Fire department service charge
Building and Personal Property Coverage
Coverage Extensions – Table 10-4
Newly acquired or constructed property
Personal effects and property of others
Valuable papers and records
Property off premises
Outdoor property
Covered only for fire, lightning,
explosion, riot or civil commotion or
aircraft
Covered Causes of Loss
Evolution
Fire
Fire and lightning (Standard Fire Policy)
Extended coverage (EC)
Vandalism and malicious mischief (VMM)
Extended Coverage
(W.C.SHAVER)
Wind
Civil commotion
Smoke
Hail
Aircraft
Vehicles
Explosion
Riot
BPP Cause of Loss Options
Basic Form – Table 10-5
Fire, lightning and extended coverages
Sprinkler leakage
Sinkhole collapse
Volcanic action
Broad Form – Table 10-5
Basic form perils plus
Weight of snow, ice or sleet
Water damage
Falling objects
Breakage of glass
Special Form – All Risk
Includes limited coverage for theft
Concurrent Causation
California court rulings of the 1980s
If a loss to property can be attributed to two or
more causes, as long as one of the causes is not
excluded the loss is covered.
Examples
Flood and negligent construction of flood control
structures (Palm Desert)
Landslide and faulty installation of drain
Other Exclusions - Maintenance
Wear and tear
Rust, corrosion, fungus, decay, deterioration, hidden or
latent defect
Smog
Settling, cracking, shrinking or expansion
Insects, birds, rodents, or other animals
Mechanical breakdown (except elevator collision)
Dampness, dryness, changes or extremes of temperature,
and marring or scratching
Other Exclusions - Theft Related
Employee dishonesty
Voluntary parting
Unauthorized instructions
Inventory shortage
Unexplained disappearance
Theft of building materials
Dollar Limitations
$2500 for furs
$2500 for patterns, dies, molds and forms
$2500 for jewelry,….gold, silver,..
$250 for stamps, tickets (including lottery tickets
held for sale, and letters of credit
Consequential Property Coverage
Business Income Coverage
Business interruption
Net income
Continuing normal operating expenses incurred
Extra expense
Monthly limit of indemnity
Maximum period of indemnity
Payroll endorsements
Other Property Coverage
Commercial Crime Coverage
Inland Marine
Boiler and Machinery
Businessowners Policy
Inland Marine Insurance
Development
Regulatory restrictions on other coverages
Could offer all-risk coverage
Less restrictive regulations
Nationwide Marine Definition
Imports
Exports
Domestic shipments
Instrumentalities of transportation and
communication (bridges, tunnels, piers, power
lines, television towers)
Various types of individual personal property
(jewelry, furs, instruments)
Various types of business property (mobile
equipment, animals, computers)
General Characteristics of Inland
Marine Policies
Coverage for property in transit
Loss exposures covered
Physical loss
Business income and extra expense
Broad coverage of perils
Valuation provisions
Actual cash value, replacement cost, selling price,
invoice value or agreed value