commercial property insurance chapter 10 business property insurance appendix c building and...
TRANSCRIPT
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 Process1 - Identify and analyze loss exposures2 - Examine the feasibility of alternative risk management techniques3 - Select the best risk management technique4 - Implement the technique5 - Monitor the program
Identify and Analyze Loss ExposuresProperty Loss Exposures
1 - The item exposed to lossReal propertyPersonal propertyValuable information
2 - The cause of loss – anything that couldcause a loss to property
3 - The effects of lossReduction in valueIncreased cost to repair or replaceLoss of revenueExtra expenseDirect 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 10-1Your business personal property – Table 10-2
Property owned by the insuredFurniture and fixturesMachinery and equipment“Stock”All other personal property owned by you and used in your businessProperty owned by othersLabor, materials or services furnished on property of othersImprovements and bettermentsLeased personal property
Personal property of others$2500 for property in the care, custody or control of insured
Property Not Covered under BPPTable 10-3Buildings and other real property
Land Roadways
Water Retaining walls
Bridges Piers
Plants and outdoor propertyGrowing crops and lawns
Outdoor crops
Outdoor trees, shrubs and plants
Outdoor fences
Outdoor signs, unless attached to buildings
Property Not Covered - continuedOther personal property
DeedsEvidence of debtMoneyCurrencyAccounts BillsSecurities and notesAlso, food stamps
Vehicles, Watercraft, AircraftAnimalsValuable papers and recordsProperty 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 10-4Newly acquired or constructed propertyPersonal effects and property of othersValuable papers and recordsProperty off premisesOutdoor 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)
BPP Cause of Loss OptionsBasic Form – Table 10-5
Fire, lightning and extended coveragesSprinkler leakageSinkhole collapseVolcanic action
Broad Form – Table 10-5Basic form perils plusWeight of snow, ice or sleetWater damageFalling objectsBreakage of glass
Special Form – All RiskIncludes limited coverage for theft
Concurrent Causation
California court rulings of the 1980sIf 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.
ExamplesFlood and negligent construction of flood control structures (Palm Desert)Landslide and faulty installation of drain
Other Exclusions - MaintenanceWear and tearRust, corrosion, fungus, decay, deterioration, hidden or
latent defectSmogSettling, cracking, shrinking or expansionInsects, birds, rodents, or other animalsMechanical breakdown (except elevator collision)Dampness, dryness, changes or extremes of temperature,
and marring or scratching
Other Exclusions - Theft RelatedEmployee dishonestyVoluntary partingUnauthorized instructionsInventory shortageUnexplained disappearance Theft of building materialsDollar 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 CoverageBusiness 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 DefinitionImportsExportsDomestic shipmentsInstrumentalities 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)