Commercial property insurance policies are used to insure larger commercial buildings and personal property in those buildings on or within 100 feet of the insured location. These policies or forms periodically undergo revisions for a variety of reasons; e.g., to reflect changes in the insurance environment, to respond to court decisions that may have altered the meaning of a particular policy provision, or to clarify provisions that previously were unclear. Recent coverage changes involving two key commercial property forms — the Building and Personal Property Form (CP 00 10) and the Causes of Loss – Special Form (CP 10 20) — are reviewed here.
The revisions introduced in this filing began taking effect on April 1, 2013, but effective dates vary by state. States must approve the filing before insurers can adopt the form changes included in the filing. Many insurers frequently do not adopt these changes immediately, while some insurers may not adopt them at all.
The Building and Personal Property Policy of the Insurance Services Office (ISO) is the standard contract for insuring building and personal property exposures of commercial insureds. The Causes of Loss – Special Form identifies the perils that are covered by the policy. The Special Form provides coverage on an open-perils basis (formerly referred to as all risks), rather than on a named-perils basis. The Special Form provides the broadest coverage of the causes of loss options.
Although the changes are too numerous to cover in their entirety here, the most important changes are examined.