Be Aware of Recent Revisions to ISO Commercial Property Coverage Forms
- ...caused by an act of nature or is caused otherwise. Seemingly, the intent here is to exclude earth movement caused by man-made activity, which in the past has been a source of considerable litigation. The revised language also re-enforces the intent of the exclusion, which is to also exclude tremors and aftershocks.
New Optional Commercial Property Endorsements
- Discharge from Sewer, Drain, or Sump (CP 10 38) —This endorsement introduces coverage for backup of water or waterborne material from a sewer, drain or sump. However, the following losses are excluded:
The endorsement also extends to business income and extra expense coverage, provided the insured carries those coverages. Thus, loss of revenue from a business shutdown caused by the discharge of a sewer or sump will be covered.
- Backup resulting from general flooding.
- The insured’s failure to perform routine maintenance.
- Sump pump failure resulting from power loss unless the policy is endorsed to cover power failure.
- Equipment Breakdown (CP 10 46) —The endorsement includes a wide range of equipment
Limitations on Coverage for Roof Surfacing (CP 10 36) — This endorsement, which has generated considerable controversy, provides two options. The first provides coverage for roof damage on an actual cash value (ACV) basis; that is, with deduction for depreciation, whereas most standard property policies provide such coverage on a replacement cost basis. It is expected that the ACV option will be targeted for risks that have older roofs that are approaching the time when they will need to be replaced. The second option is to exclude cosmetic damage caused by wind or hail. Cosmetic damage refers to denting, pitting or marring that affects the appearance of the roof surface but does not prevent the roof from functioning as a barrier to water intrusion.
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