ISO ANIMAL MORTALITY COVERAGE FORM ANALYSIS

The Insurance Services Office (ISO) Animal Mortality Coverage Form insures animals other than those that livestock coverage forms or farm policies traditionally cover. The coverage is about death. Loss payment is made only when the animal dies because of a covered accident, injury, sickness, or disease. Unusually valuable farm horses, cattle, racehorses, show dogs and cats, laboratory animals, and circus animals are examples of animals this coverage form insures.

POLICY CONSTRUCTION

Animal Mortality Coverage requires at least the following six forms:

IL DS 00–Common Policy Declarations
IL 00 17–Common Policy Conditions

CM DS 02–Commercial Inland Marine Declarations
CM 00 01–Commercial Inland Marine Conditions

IH DS 69–Animal Mortality Declarations
IH 00 69–Animal Mortality Coverage Form

IH DS 69–ANIMAL MORTALITY DECLARATIONS

The advisory Animal Mortality Declarations does not have spaces for the named insured, its mailing address, other named insured information, the policy period, or the insured’s business description. That information is entered on the Common Policy Declarations. IH DS 69 contains the following information:

Insurance Company and Producer Name

The name of the insurance company that provides the coverage and the name of the agent or broker that produces the business are entered in the spaces provided.

Description of Property, Limits of Insurance, and Optional Coverages

This section has spaces to describe the type of animal, its name, its use or purpose, and the limit of insurance that applies to it. There are two optional coverages available that require entry if coverage is desired:

A box is to be checked when Optional Permanent Disability coverage is to apply.
Medical and Surgical Coverage section is completed with the per occurrence and aggregate limits and deductible that applies. If completed, the IH 69 02–Medical and Surgical Coverage must be attached.

There are spaces to list three animals.

All Covered Property in Any One Occurrence

This section has a space to enter a cap on the limit of insurance available for all covered property damaged in a single occurrence. This might be called a catastrophe limit on other coverage forms.

Fire Department Service Charge

This section has a space to enter a higher limit of insurance than the $1,000 limit in the coverage form.

60 Day Extension

This section has a space to enter a different number of days from the 60 days in the coverage form. This is the number of days the policy is extended after the policy’s expiration date for coverage to apply to an animal’s death following a covered injury that occurred within the policy period.

Rates and Premiums

This section has spaces for the rates per $100 of value and the total premium charge.

Special Provisions

Any special provisions are entered in the space provided.

IH 00 69–ANIMAL MORTALITY COVERAGE FORM ANALYSIS

This analysis is of the 12 13 edition. Changes from the previous edition are in bold print.

Introduction

This section encourages carefully reading the entire coverage form to determine what is covered, what is not covered, rights, and duties. It defines we, us, and our as the insurance company that provides this insurance coverage. It also defines you and your as the named insured on the declarations. The reader is also pointed to the Definitions section because certain words or terms used in the form have a more broadened or restricted meaning.

A. Coverage

The insurance company pays for loss of covered property but only when that loss is from a covered cause of loss.

1. Covered Property

The only property covered is/are the animal(s) specifically listed and described on the declarations.

2. Property Not Covered

The following property is excluded even if it is listed on the declarations:

Animals that the named insured does not solely own
Any animal that a licensed veterinarian determines is no longer fit or is unable to perform its purpose as described on the declarations. This applies only if the condition is considered permanent.
Animals that are being used for any purpose other than as stated on the declarations
Any animal with an injury, illness, or disease that is known about on the policy’s inception date
Contraband. Any property that is illegal for the named insured to own or in illegal trade or transportation is not covered.

3. Covered Causes of Loss

Death is the only covered cause of loss. However, it must be from an accident, injury, illness, or disease.

4. Additional Coverages

The following coverages provide additional amounts of insurance.

a. Additionally Acquired Property

The named insured may acquire additional property during the policy period similar to the kind the coverage form already insures. If it does, the insurance company covers such additional property for up to 60 days but not beyond the policy’s expiration date. This additional coverage does not increase the limit of insurance on the declarations.

The insurance company pays no more for the loss involving newly acquired property than the amount the named insured paid for it or $50,000, whichever is less. The named insured must report the value of new acquisitions within 60 days after the purchase date and pay an additional premium from the purchase date. If the named insured does not report the acquisition, coverage automatically ends at the earliest of the end of the 60 days or the date the policy expires.

Example: Farmer John purchases a horse for breeding purposes nearly identical to the one he now owns and has listed on his Animal Mortality policy. He purchases it a month before the policy expires. He is so busy with farming operations that he forgets to tell his insurance agent about the new acquisition. The horse suddenly dies from hoof and mouth disease a week after the policy expires. This reminds John to notify the agent of both the acquisition and the death. Unfortunately, for John, the claim is denied because the 60-day additional coverage provision does not apply after the policy expires.

b. Fire Department Service Charge

The insurance company pays up to $1,000 when the fire department is called to save or protect covered property from a covered cause of loss. The limit can be increased by entering a higher limit on the declarations. The limit applies regardless of the number of responding fire departments, fire units, or the number or type of services performed.

This coverage applies to only the named insured's liability for fire department service charges either that it contractually assumes before a loss occurs or that a local ordinance or law requires it to pay.

5. Coverage Extensions

There are three Coverage Extensions. They do not provide additional amounts of insurance.

a. Theft

The insurance company pays for theft of an animal. However, there is no coverage if it is recovered alive. When the insurance company pays for a theft claim, and the animal is later recovered alive, the named insured must return that payment. Other injuries the animal sustains during the theft are excluded unless they result in the animal’s death.

Example: Many people who attend horse shows admire the Clydesdale that Jim owns and takes to those shows. One specific admirer decides he simply must have the horse for himself, takes it from the corral, and makes off with it in his horse trailer. The horse was recovered two months after the insurance company paid the theft loss. It had been mistreated so badly during that time that it would never recover and be the horse it once was. Jim decides he would rather keep the money than the horse. However, the condition in this coverage extension requires that he return the loss payment to the company.

b. Humane Destruction

There are circumstances when an animal is so badly damaged that the only humane thing to do is immediately destroy it to keep it from further suffering. If a covered animal suffers such an injury, there is coverage for the loss sustained when the animal dies. This coverage applies only if the insurance company gives its permission in advance. However, this requirement is waived when an animal is injured in an organized competitive event where a licensed veterinarian is present and verifies that the animal’s humane destruction is appropriate and in order. This extension does not apply to the destruction of an animal due to its contracting (or being exposed to) a communicable or contagious disease.

Example: A lion that escapes from its cage frightens the elderly bull elephant that belongs to the Bumbling and Fumbling Circus. The elephant charges out of the big top and breaks both of his front legs after he strikes a log barrier. A veterinarian in the crowd rushes to examine the animal and informs its trainer that it must be put down. The elephant writhes and thrashes about in pain and is injected with a drug that immediately induces respiratory arrest and immediate death. The loss is not covered because advance permission was not obtained, and the injury did not occur during a competitive event.

c. 60 Day Extension

When an animal sustains an injury or illness, has an accident or contracts a disease during the policy period, if death results during the policy period or for up to 60 days following the policy expiration, coverage applies. The named insured must have reported such an occurrence before the policy expires. This time period can be increased. This extension does not apply to short-term policies or policies written for less than a one-year term. The 60-day period can be increased.

Example: Whirleygig breaks a leg as he comes out of the starting gate at the Grand National horse race at the State Fair in late August. Three veterinarians work as a team to repair the break and place the horse in a sling, hoping the injury will heal and he can be saved. The Animal Mortality policy that covers Whirleygig expires on September 15. A severe uncontrollable infection sets in, and Whirleygig dies on October 15. Because of this extension, the insurance company pays the horse’s value even though the death occurred after the policy expired.

B. Exclusions

1. Primary Exclusions

The first group of exclusions applies whether the loss event results in widespread damage or affects a significant geographical area and is essentially absolute. Subject to specific exceptions, each is totally excluded, regardless of any other cause or event contributing to a loss concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or resulting from any of these events.

a. Governmental Action

This exclusion applies to the legal and authorized seizure or destruction of property by a government entity’s order. However, it has an exception for loss or damage caused by or that results from such acts of destruction the governmental entity orders or directs at the time of a fire to prevent it from spreading. This applies only if this coverage form provides coverage for that fire.

b. Nuclear Hazard

This exclusion applies to nuclear reaction, radiation, or radioactive contaminants from any cause or source. It has an exception for cases where the nuclear reaction, radiation, or radioactive contamination results in a fire. If this coverage form covers fire, the insurance company pays for the direct loss or damage caused by the resulting fire.

c. War and Military Action

This exclusion lists three specific warlike activities.

War. This can be a declared war, an undeclared war, or a civil war.
Military force of a warlike nature. These activities must utilize military personnel or agents of a government or other type of authority. Actions taken to prevent any of these activities are also considered war.
Insurrection, rebellion, revolution, and attempts to usurp power. Any action a government takes to respond to such actions is also considered war.

2. Secondary Exclusions

The second group of exclusions applies to loss or damage caused by or resulting from any of the following loss events. Some of these exclusions have exceptions, conditions, or limitations that should be noted and reviewed carefully. The insurance company does not pay for any loss or damage caused by or resulting from any of these events.

a. Delay, loss of use, and loss of market

These are consequential or indirect losses that develop as a result of direct loss or damage. Specifically to this type of coverage, any reduction in an animal’s value because it can no longer fulfill its purpose as stated on the declarations as not covered.

b. Intentional acts (12 13 changes)

Any intentional acts that the named insured, its partners, employees, temporary employees, leased workers, officers, directors, trustees, authorized representatives, or members and managers of a limited liability company commit are excluded. This exclusion applies whether the persons act alone or collude with others. It also applies whether or not the acts take place during regular working hours. The one exception is when humane destruction takes place as described earlier in this coverage form.

The 12 13 edition removed the part of the exclusion in the previous edition that applied to intentional acts committed by anyone entrusted with the property for any reason. It also deleted the exception to the exclusion in the previous edition for covered property entrusted to carriers for hire.

c. Surgery

If an animal dies because of a surgery, there is coverage only if the insurance company agrees to it in advance. The surgery must also be certified by and performed by a licensed veterinarian in an attempt to save the animal's life.

d. Medication

An animal may die because of medication, such as drugs, vitamins, hormones, and proteins. If so, there is no coverage. There is an exception. If the medications are administered as needed and required to treat an injury, illness, or disease, there is coverage, but only if a licensed veterinarian administers the medication or directs another to administer it.

e. Dishonest or criminal acts (12 13 changes)

These are any dishonest or criminal acts that the named insured, its partners, employees, temporary employees, leased workers, officers, directors, trustees, authorized representatives, or members and managers of a limited liability company commit. This exclusion applies whether the persons act alone or collude with others. It also applies whether or not the acts take place during regular working hours.

The 12 13 edition removed the part of the exclusion in the previous edition that applied to dishonest or criminal acts committed by anyone entrusted with the property for any reason. It also deleted the exception to the exclusion in the previous edition for covered property entrusted to carriers for hire.

Example: Pedro, Lost Lake’s primary stallion, is stolen. The insurance company investigates and settles the claim in full. Later, a tip leads police to a shallow grave where Pedro had been buried. The police discovered that the named insured had learned about a genetic defect in Pedro that would eliminate his value as a stud. The named insured decided to destroy Pedro and collect the insurance money to help offset his losses. The insurance company demanded its money back and that the police arrest Lost Lake’s president for fraud.

f. Straying, escape, or unexplained disappearance

If an animal strays, escapes or disappears for an unknown reason, there is no coverage if death results.

g. Voluntary parting

This is the named insured or anyone else entrusted with the property being tricked or deceived into giving it away.

h. Unauthorized instructions

This is when covered property is transferred to another person or place because of unauthorized instructions to do so.

i. Neglect

This is when an insured damages an animal’s health by neglecting to provide proper care or treatment.

C. Limits of Insurance

The most the insurance company pays for loss or damage in a single occurrence is the limit of insurance on the declarations for the applicable coverage.

D. Additional Conditions

1. Valuation

The value of each animal is its expected sale price in a fair market. A fair market is considered the price the animal would have received if it had been sold for its stated purpose just before the condition that led to its death. This valuation condition replaces the Valuation General Condition in the Commercial Inland Marine Conditions.

2. Duties in The Event of Loss

If a covered animal dies, the named insured must give the insurance company a copy of the death certificate that a qualified veterinarian issued. When the insurance company requires an autopsy of the animal, the named insured must pay for the autopsy by a qualified veterinarian and give the insurance company a detailed report on that autopsy. This duty is added to the Duties in The Event of Loss Condition in the Commercial Inland Marine Conditions.

3. Other Conditions

These conditions apply in addition to IL 0017–Common Conditions and CM 00 01–Commercial Inland Marine Conditions:

IL 00 17–Common Policy Conditions Analysis

CM 00 01–Commercial Inland Marine Conditions

a. Care or Treatment

The named insured must hire a qualified veterinarian to provide the proper care or treatment if a covered animal sustains an accident, injury, illness, disease, lameness, or physical disability. The veterinarian must do what is possible to save the animal's life in danger of death. The named insured is responsible for the expenses and costs of the veterinarian. The insurance company is responsible for any expenses it incurs only when it intervenes to provide care or treatment.

b. Notice of Accident, Injury, Illness, Disease, or Theft

The named insured must immediately inform the insurance company of any accident, injury, illness, disease, lameness, physical disability, or theft that involves a covered animal.

c. Coverage Territory

The coverage territory is the United States of America, its territories and possessions, Puerto Rico, and Canada. This includes property that is shipped by air within and between these points.

E. Definitions

There is one definition.

Humane destruction

This is the destroying of an animal to end its continued suffering when the suffering is considered both incurable and excessive.

ENDORSEMENTS

ISO has developed two specific endorsements to be used exclusively with the Animal Mortality Coverage Form.

IH 69 01–Permanent Disability Coverage

Death is the only covered cause of loss in IH 00 69–ISO Animal Mortality Coverage Form. This endorsement adds another cause of loss. It covers an animal’s total and permanent disability caused by, that results from, or that arises out of an accident, sickness, or disease. The disability must make the animal permanently unfit for and incapable of performing its intended purpose.

When payment is provided under this endorsement, any other coverage available under this policy for that animal is immediately terminated, and the named insured receives a return premium.

IH 69 02–Medical and Surgical Coverage

Veterinary fees for surgery or medical treatment are not covered causes of loss in the ISO Animal Mortality Coverage Form. This endorsement covers such charges associated with any surgery or medical treatment for a life-threatening accident, injury, sickness, or disease. The limits for coverage must be displayed on IH DS 69–Animal Mortality Declarations.

UNDERWRITING CONSIDERATIONS

Underwriting animal mortality coverage begins with identifying the animal(s) to be insured. This is followed by:

Determining if any of them has been sick or injured in the previous 12 months
If any are receiving any treatment or medication
Understanding the daily care each animal receives

Details are required concerning any animal that has ever been outside the United States. The name and address of the veterinarian who usually cares for the animal(s) must be disclosed, along with any loss experience for any similar animals that have died in the past three years. The named insured should maintain detailed health and related records on each animal insured.

It should be noted that loss potential varies by type of animal and breed. Some animals may not be considered insurable after reaching a certain age.

The named insured’s experience in its business and financial condition directly affect its ability to provide proper daily care for the animals and respond to their medical and emergency needs.

Animals at fixed or permanent locations are exposed to traditional property underwriting issues that involve construction, occupancy, protection, and exposure. The following are important issues to consider:

Any guard service provided
Hazardous or flammable materials stored or used on the premises
Any sprinkler and/or fire alarm systems. This includes maintenance records.
Fire doors or other effective fire divisions within the premises
An adequate number of fire extinguishers properly placed around the premises
Any animals kept above or below grade level
Exposure to flood or earthquake
Potential for theft or vandalism

The named insured should always implement an effective loss control program that addresses the various property considerations, transportation issues, management experience, and practices affecting all kinds of animals.