ISO Exhibition Coverage Form

ISO EXHIBITION COVERAGE FORM ANALYSIS

(April 2024)

 

Introduction

Policy Construction

IH DS 92–Exhibition Declarations

IH 00 92–Exhibition Coverage Form Analysis

Introduction

A. Coverage

   Covered Property

   Property Not Covered

   Covered Causes of Loss

   Additional Coverages

B. Exclusions

C. Limits of Insurance

D. Deductible

E. Additional Conditions

F. Definitions

Endorsements

Underwriting Considerations

INTRODUCTION

The Insurance Services Office (ISO) Exhibition Coverage Form covers various types of property while on exhibition or being displayed at trade shows, expositions, fairs, and similar venues. An unusual feature is that coverage applies only while the property is NOT at the named insured premises. Coverage applies to covered property only while at exhibition or show sites or in transit.

POLICY CONSTRUCTION

Exhibition Coverage requires at least the following six forms:

Related Article: IL 00 17–Common Policy Conditions Analysis

Related Article: CM 00 01–Commercial Inland Marine Conditions

IH DS 92–EXHIBITION DECLARATIONS

The advisory Exhibition Declarations does not have spaces for the named insured, its mailing address, other named insured information, the policy period, or the description of the insured business. That information is on the Common Policy Declarations. IH DS 92 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.

Location of Exhibitions

This section has spaces to list and describe the location addresses of all exhibitions. Blanket coverage at all exhibition locations or for all exhibitions without listing locations or addresses is available as an option.

Description of Covered Property

This section has spaces to list and describe the general types of covered property at exhibits.

Note: The description should include the phrase "consisting principally of but not limited to" so that coverage is not so narrow as to exclude legitimate property that is inadvertently not listed or described.

Limits of Insurance

This section has spaces to enter limits of insurance for the following:

Coinsurance

This section has a space to enter the coinsurance percentage that triggers the coinsurance additional condition if coinsurance applies.

Deductible

This section has a space to enter the amount of deductible that applies.

Rates and Premiums

This section has spaces to enter the rates and premiums for the coverage provided.

Special Provisions

Any special provisions are entered in the space provided.

IH 00 92–EXHIBITION 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 broader or restricted meaning.

 A. Coverage

The insurance company pays for direct physical loss or damage to covered property but only when that loss is from a covered cause of loss.

1. Covered Property

Covered property is the following:

a. The named insured’s property that is described on the declarations. Property of others in the named insured’s care, custody, or control is also covered if described on the declarations.

b. Coverage applies only when the covered property is at any of the following:

Coverage does not extend past the policy’s expiration date.

Example: Roger’s Roofing Solutions displays its products at a roofing industry convention. Roger also has permission to display a variety of flashing products manufactured by Fred’s Finer Flashings to supplement and complete his display. Roger includes the values of Fred's goods along with his own on his Exhibition Coverage Form and schedules the dates and location of the roofing convention. The value of both Roger’s and Fred’s property is covered up to the limit of insurance.

2. Property Not Covered

The following described property is excluded:

a. Accounts, bills, currency, deeds, evidence of debt, money, notes, or securities.

Note: This property is primarily money or substitutes for money. It should be insured under commercial crime coverage forms.

Related Article: Commercial Crime Coverage Analysis

b. Property while in the mail

Example: Roger decides to mail some of his products to the convention site instead of transporting them himself. He knows his Exhibition Coverage Form includes a limit for goods in transit and turns down the United States Post Office’s offer to insure the shipment. However, Roger fails to read the fine print that excludes property sent in the mail. He finds out about the exclusion very quickly when the shipment does not arrive, and the insurance company claims adjuster rejects his claim on the lost shipment. Fortunately, for Roger, the value of the property lost was minor.

c. Waterborne property. There is an exception. If the waterborne property is moving on inland waterways and the water portion of the transportation is incidental to the land, transportation coverage applies.

 

Example: Roger uses Tim’s Timely Trucking for his shipment. Tim loads the shipment on a box truck and heads for the convention site only to discover that recent flooding washed out a bridge. Tim must either drive over 200 miles out of the way to cross on another bridge or drive the truck aboard a local ferry and cross where the bridge used to be. Tim decides to use the ferry and pay the additional charge for the service. When the ferry capsizes, and Roger’s shipment is lost, coverage applies because of the exception to this exclusion.

d. Import shipments up to the point where they are discharged from the import mode of transportation or until the ocean marine coverage provided ends, whichever occurs first

Example: Roger has special fasteners he uses with his roofing materials manufactured for him by a company in Taiwan. The Taiwanese company sends a supply of these fasteners to him, which arrive from the port of entry, to exhibit at the roofing convention.

The fasteners are damaged while on the vessel, and Roger has no coverage for the damaged property because the damage happened before they were discharged.  

e. Export shipments after they are put on the export mode of transportation or when ocean marine insurance takes effect and applies to the shipment, whichever occurs first.

Example: Some roofing product manufacturers at the convention identified some deficiencies in the fasteners. Roger decided to send the product back to the Taiwanese manufacturer to incorporate the changes needed to eliminate the deficiencies. Coverage on this form ends when the property is placed with the transport carrier.

f. Contraband. Any property that is illegal to own or in illegal trade or transportation is not covered.

Example: Mario was taking examples of his latest marijuana crop from Colorado to California for an exhibit. Unfortunately, he was involved in an accident in Utah, and the property burned up. Because he was in Utah at the time of the accident, where marijuana is illegal, the loss is not covered because in Utah, marijuana is contraband.

3. Covered Causes of Loss

Covered causes of loss are direct physical loss or damage to covered property with the exception of causes of loss that are listed in the exclusions section.

4. Additional Coverages

a. Debris Removal

A property damage loss usually creates debris that must be removed. The insurance company pays the cost of removing the debris of a covered loss. The expenses must be reported to the insurance company in writing within 180 days of the date of loss. The most paid is 25% of the sum of the following:

Payments under this Additional Coverage do not increase the applicable insurance limit. However, the insurance company pays an additional $5,000 per occurrence when the direct physical loss or damage combined with the debris removal expense exceeds the limit of insurance or when the debris removal expense is more than the amount payable under the above described 25% limitation.

This coverage does not apply to costs to extract pollutants from land or water or remove, restore, or replace polluted land or water.

b. Preservation of Property

Covered property may need to be moved from an insured location to prevent damage by a covered cause of loss. In that case, the insurance company pays for any direct loss or damage such property sustains during the move. In addition, coverage applies at the location where the property is stored for up to seven days after the date it was moved there.

The limit for this additional coverage does not increase the limit of insurance.

Notes: There are several important points to consider:

The property removed must be moved back to the covered location or the temporary location must be added to the policy within seven days from the date of the move. Otherwise, all coverage ends after seven days.

Example: Hurricane warnings force the roofing convention to close down. Roger accepts another exhibitor’s offer to move his merchandise to a safe inland storage location. Roger is happy to be at the safe location but is very unhappy when he goes to retrieve the merchandise, and it has been taken, and the friendly fellow exhibitor cannot be found. This loss would typically be excluded as voluntary parting or theft, but because the property had been moved to preserve it, the exclusions do not apply.

c. Pollutant Clean Up and Removal

The insurance company pays to clean up pollutants caused by or resulting from a covered cause of loss that occurs during the policy period. The most paid is $10,000 per premise as an aggregate amount during each separate 12-month policy period. The expenses are paid only if they are reported to the insurance company in writing within 180 days of the date of loss.

This coverage does not apply to costs to evaluate the presence or effects of pollutants. However, it does pay for testing that is part of the process of extracting pollutants from either land or water.

The limit can be increased. This limit is an additional amount of insurance.

B. Exclusions

1. Primary Exclusions

The first group of exclusions applies whether or not 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 that contributes to a loss, either concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or results 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. There is one exception. Loss or damage that is caused when the governmental entity orders property to be destroyed is covered if used as a method to prevent a fire from spreading is covered. However, this exception applies only if the fire being contained would have been a covered fire under this coverage form.

 b. Nuclear Hazard

Nuclear reaction, radiation, or radioactive contamination is not covered. There is an exception. If a fire results from the nuclear reaction, radiation or radioactive contamination there is coverage for the direct loss or damage caused by that fire.

c. War and Military Action

This exclusion lists three specific warlike activities.

2. Secondary Exclusions (12 13 changes)

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 that result from any of these events.

a. Theft from an unattended vehicle

This is loss due to theft from an unattended vehicle. There are two exceptions.

Example: Roger unloads nearly all of his merchandise for the roofing association trade show from his panel van and leaves to visit with other exhibitors. However, he forgets to lock the back doors of the van. He returns, opens the doors, and finds the cargo area empty and the merchandise he did not unload gone. This loss is not covered because there are no marks on the van that show that a forced break-in occurred.

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

These are consequential or indirect losses that develop as a result of a direct loss or damage.

c. Unexplained disappearance

When covered property is gone and there is no obvious cause or explanation of what happened to it.

 d. Shortage found upon taking inventory

Any loss discovered as a result of an inventory shortage, and there is no explanation as to what happened to the property, similar to the unexplained disappearance. This is sometimes referred to as "inventory shrinkage."

e. Dishonest or criminal acts (12 13 changes)

These are any dishonest or criminal acts 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 also includes theft.

Such acts committed by anyone with an interest in the property, their employees, temporary employees, leased workers, or authorized representatives who act alone or who act in collusion with other parties or with each other are also excluded. This exclusion also applies whether or not the acts take place during regular working hours.

This exclusion does not apply to acts of destruction by the named insured’s employees, temporary employees, leased workers, or authorized representatives. However, there is no coverage for theft by the named insured’s employees, temporary employees, leased workers, or authorized representatives.

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.

f. Processing or work upon the property

This is loss or damage caused by or resulting from the actual processing or work done on covered property. However, if the processing or work done results in a fire or explosion, coverage applies to the loss or damage that fire or explosion causes if this insurance covers fire and explosion.

g. Artificially generated electrical, magnetic, or electromagnetic energy

Loss or damage that is caused by or that results from artificially generated electrical, magnetic, or electromagnetic energy damaging, disturbing, disrupting, or interfering with any of the following:

Examples of this excluded energy are electrical current, charges a magnetic or electromagnetic field produces, and microwaves, but is not limited to just these. There is one exception. If the energy described in this exclusion results in a fire, coverage applies to the direct loss or damage that fire or explosion caused but only if the fire is considered covered causes of loss under this coverage form.

This exclusion does not apply to all property. It applies to only loss or damage to the specific article in which the disturbance occurs.

h. Voluntary parting

The named insured or anyone else entrusted with the property being tricked or deceived into giving that property away.

i. Unauthorized instructions

When covered property is transferred to another person or place because unauthorized instructions were received to do so.

j Neglect

Neglect on an insured’s part to do take reasonable measures to preserve and protect covered property from subsequent damage during and after the time of loss.

 k. Theft (12 13 addition)

Theft by any person the named insured entrusts covered property to for any reason, whether they act alone or act in collusion with any other party. This exclusion applies 24 hours a day/7 days a week. There is one exception. Covered property in a carrier for hire’s care, custody, or control is not subject to this exclusion.

 3. Other Exclusions

This group of exclusions applies to loss or damage caused by or resulting from any of the following loss events. In every case, if loss or damage by a covered cause of loss occurs as a result of one of these excluded events, coverage applies to the loss or damage the resulting covered cause of loss causes. The insurance company does not pay for any loss or damage caused by or that results from any of these events.

a. Wear and tear, depreciation

This is loss or damage due to wear, tear, and depreciation.

Notes:

Wear and tear is damage that occurs naturally as a result of aging or normal wear.

Depreciation is loss of value due to wear.

b. Any quality in the property

These are any qualities in the property that cause it to destroy or damage itself.

Note: An example is loss or damage caused by hidden or latent defects in the property.

c. Breakdown of covered property

This is loss or damage caused by or that results from covered property failing to operate or function properly.

d. Malfunction or failure of covered property to operate

This is when covered property malfunctions or fails to operate and causes loss or damage to covered property.

Note: Malfunction means to function improperly, to fail to operate at all, or to function in a faulty or abnormal way.

e. Insects, vermin, or rodents

This is loss or damage to covered property caused by or that results from insects, vermin, or rodents.

Note: Some examples are damage from mice, rats, cockroaches, squirrels, beavers, spiders, ants, centipedes, and ticks. Each is characterized by destructive habits that cause damage, such as gnawing and nibbling.

f. Rust (or other corrosion), dampness, or extremes of temperature

This is rust, other corrosion, dampness, or extremes of temperature that cause loss or damage to covered property.

Notes:

Rust and corrosion are low-temperature oxidation processes that result in deterioration over time due to inactivity or neglect.

Dampness and temperature extremes can affect the oxidation process that affects different forms of property and can also have other effects on the same and other forms of property.

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. Deductible

The insurance company does not pay for loss or damage until the amount of the adjusted loss or damage (before capping with the appropriate limit of insurance) exceeds the deductible on the declarations. It then pays the amount of the adjusted loss or damage that exceeds the deductible up to the limit of insurance that applies.

E. Additional Conditions

1. Valuation

This condition is added to the Valuation General Condition in the Commercial Inland Marine Conditions.

Property of others in the insured's care, custody, or control may have a consigned value to which the named insured and the property’s owner agreed. In that case, the value of any such property is the lowest consigned value.

2. Other Conditions

These conditions apply in addition to the Commercial Inland Marine Conditions and the Common Policy Conditions.

Related Articles:

IL 00 17–Common Policy Conditions Analysis

CM 00 01–Commercial Inland Marine Conditions

a. 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.

b. Coinsurance

This condition applies if there is a coinsurance percentage on the declarations.

The insurance company does not pay the full amount of any loss or damage if the value of covered property at the time of loss or damage multiplied by the coinsurance percentage is more than the limit of insurance for all covered property at that location. In such cases, the amount the company pays is determined as follows:

Step 1. Multiply the value of the covered property at the time and location of the loss or damage by the coinsurance percentage on the declarations.

Step 2. Divide the limit of insurance for covered property at the location where the loss or damage occurred by Step 1.

Step 3. Multiply the total amount of loss or damage at the loss location by Step 2. before applying the deductible (if any).

Step 4. Subtract the amount of deductible from Step 3.

The insurance company pays the lesser of Step 4. or the limit of insurance. Any amount that remains must be paid by other insurance, or the named insured must pay it from its own funds.

F. Definitions

There is one definition.

Pollutants

These are any solid, liquid, gaseous, or thermal irritants or contaminants. Pollutants also include smoke, vapor, soot, fumes, acids, alkalis, chemicals, or waste. Waste is any material intended to be recycled, reconditioned, or reclaimed.

ENDORSEMENTS

ISO has not developed any specific endorsements for exclusive use with the Exhibition Coverage Form. ISO has developed two other endorsements that can be used to respond to specific situations.

IH 99 06–Schedule

Additional items can be listed on this schedule when they do not fit on the Declarations.

IH 99 19–Additional Covered Property

This endorsement is used to include coverage for types of property ordinarily excluded.

IH 99 20–Additional Property Not Covered

This endorsement is used to exclude certain types of property the coverage form insures.

IH 99 22–Loss Payable

Loss payees who have insurable interests in covered property are listed on this endorsement along with the property in which they have that interest.

Note: No commitment is made to notify them of any cancellation.

UNDERWRITING CONSIDERATIONS

Exhibition risks are evaluated based on the degree of hazard that applies in each individual situation. Hazards range from low to high, and determining the correct risk category includes evaluating issues like earthquake, flood (and other water damage), theft, exposures in transit (and during temporary storage), and the covered property’s degree of damageability. Other factors to consider include fire and other property-oriented loss factors, theft, mysterious disappearance, breakage, and management issues.

The Exhibition Coverage Form can apply to any type of property not excluded or limited. As a result, underwriting the exposure begins by evaluating the nature and type of property to be covered. The property’s damageability and value determine the underwriting concerns and approach. Fragile or easily damaged property requires more care in handling, packing, and transit than property less prone to damage, as well as more attention during the exhibit to eliminate damage due to mishandling. Unusual or valuable property requires security measures to prevent burglary, theft, or misappropriation.

Security provisions at the exhibition site and while the property is in transit must be evaluated. The extent of security and protection at the exhibit site may determine whether or not the named insured must physically stay with the property at all times. The duties and obligations of each party in the contract to use the exhibition site with regard to security arrangements must be clearly outlined.

The insured that has only one or a few regular exhibitions each year usually lists and describes each exhibition. Others that have many exhibitions annually or exhibitions that may arise suddenly and with little advance warning are better served by using a blanket exhibitions approach. Regardless of the approach selected, the nature of the exhibitions must be evaluated. Outdoor exhibitions present additional concerns, such as security and protection arrangements after hours or contingency plans because of unexpected or inclement weather conditions. Evacuation plans are needed in all cases. Exhibitions conducted indoors involve evaluating construction, occupancy, public, and private protection, and surrounding exposures, as well as any special attention and handling needed, depending on the type of property being exhibited.

Transit coverage is a major factor because coverage begins when the goods being exhibited leave the named insured's premises and ends when they return. The mode of transportation must be considered, along with the bill of lading or shipping document, if the named insured uses a carrier for hire. The valuation terms should be adequate and may need special attention if the merchandise is valuable, unique, or special in any way. In addition, some property may also be fragile and easily damaged, so packing and handling issues must be addressed. If transportation involves the named insured's own vehicles, the same issues exist, along with determining the adequacy of the motor vehicle for the job and the experience of the drivers and helpers while driving, loading, and unloading the merchandise.

If exhibition coverage is written on a scheduled basis, accurately establishing the dates when coverage applies is critically important because coverage begins and ends on the dates listed. Coverage includes transportation to and from the event, so those dates must be considered and included when establishing the dates. Adding time at the beginning and the end is suggested, since unexpected circumstances or delays can develop that could affect coverage.

Example: Ernie at Ernie’s Electronics accepts an invitation to participate in a home electronics show scheduled to run from 06/01 through 06/07. He plans to leave on 05/30 to travel to the show location and return on 06/09. Ernie’s insurance agent arranges coverage for the dates requested. Ernie receives an invitation to attend a special pre-exhibit showing of his equipment on 05/25. He leaves on 05/28 (instead of the previously arranged date) but forgets to call his agent and tell him about the change. An accident in transit occurs on 05/28, and the equipment Ernie planned to exhibit is destroyed. This loss is not covered because the loss occurred before the coverage was scheduled to begin.