ISO RADIO AND TELEVISION TOWERS AND EQUIPMENT COVERAGE FORM ANALYSIS

The Insurance Services Office (ISO) Radio and Television Towers and Equipment Coverage Form insures broadcasting type property of radio and television broadcasting stations such as the radio and television towers, transmitting, receiving, recording, and monitoring equipment, and mobile units. Buildings, extra expense for buildings, and extra expense for towers are not covered but can be included as an option.

POLICY CONSTRUCTION

Radio and Television Towers and Equipment 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 77–Radio and Television Towers and Equipment Declarations
IH 00 77–Radio and Television Towers and Equipment Coverage Form

IH DS 77–RADIO AND TELEVISION TOWERS AND EQUIPMENT DECLARATIONS

This analysis is of the 06 14 edition. Changes from the previous edition are in bold print.

The advisory Radio and Television Towers and Equipment Declarations does not have spaces for the named insured, its mailing address and other named insured information, the policy period, or the description of the insured business. That information is on the Common Policy Declarations.

IH DS 77 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.

Limits of Insurance

This section has four subsections.

The first has spaces to enter Limits of Insurance for Covered Property by Location Number and Location Address or Description for the following:

Radio and Television Towers
Radio and Television Transmitting and Receiving Equipment
Business Personal Property

Note: A description is often needed in lieu of an actual address because such equipment is often placed in areas without formal addresses.

The second has spaces to enter the Item Number, Description, and Limit of Insurance for each Mobile Unit.

The third has spaces to enter the sub-limits for the following:

Earthquake for Each Occurrence
Earthquake Aggregate Limit in Any One Policy Year
Water Damage for Each Occurrence
Water Damage Aggregate Limit in Any One Policy Year

The fourth has spaces to enter the limits of insurance for optional coverages and revised limits for additional coverages as follows:

Buildings

When a limit is entered, optional coverage applies to the buildings at the location entered.

Fire Department Service Charge

A limit entered replaces the $1,000 limit in the coverage form.

Fungi, Wet Rot, and Dry Rot

Three different entries can be made that alter the coverage within this additional coverage:

o The limit can be increased to a higher limit than $15,000.

o The number of days can be increased from 30.

o The limit can be changed from one limit that covers all locations to one limit that applies per location.

Note: There was a provision below this section to add Optional Coverage–Extra Expense in the previous edition of IH DS 77. This 06 14 edition does not because the 06 14 edition of IH 00 77 does not provide that optional coverage.

All Covered Property in Any One Occurrence

This is a catastrophe limit that caps the amount the insurance company pays for damage to all covered property in a single occurrence.

Note: Whenever the limits in the Limits of Insurance section are altered, this limit must also be reviewed. Raising individual limits without also increased this limit can result in an unanticipated capping.

Replacement Cost Provisions

This section contains boxes to check that activate replacement cost valuation for Property Other Than Stock and for Stock. A check mark in either box means the Replacement Cost Provisions apply to that property.

Coinsurance

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

Deductibles

This section has spaces to enter the amount of deductible that applies to the following:

Earthquake

The earthquake deductible is based on the percentage entered in this section multiplied by the value of the property that is at the loss location. It is subject to the minimum deductible entered in this section.

Water Damage is a flat deductible
All Other Covered Causes of Loss is a flat deductible

Note: This section in the previous edition of IH DS 77 had provisions for a deductible for Extra Expense. This 06 14 edition does not because the 06 14 edition of IH 00 77 does not provide that optional coverage.

Rates and Premiums

This section has spaces to enter the Rates and Premiums for the coverages provided.

Special Provisions

Any special provisions are entered in the space provided.

IH 00 77–RADIO AND TELEVISION TOWERS AND EQUIPMENT COVERAGE FORM ANALYSIS

This analysis is of the 06 14 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 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 property but only at locations with a limit of insurance on the declarations.

a. Radio and television towers. Antennas, auxiliary equipment, and electrical operating and control devices directly related to those towers are also covered.

b. Radio and television equipment if it transmits, receives, records, or monitors

c. Business personal property. This is limited to only furniture, fixtures, tenants’ improvements and betterments, patterns, dies, molds, models, machinery, tools, fittings, sets, props, scenery, and office supplies.

d. Mobile units

Note: Other property not listed above is excluded as this policy is now written. Because of technology and its impact on this rapidly changing industry creating new devices, equipment, and insurance coverage opportunities, it might be better if the wording was slightly changed. It might say "property consisting principally of (but not necessarily limited to) the following."

2. Property Not Covered

The following described property is not covered:

a. Property that is leased, rented, or sold to others. Property that is sold by the named insured under deferred payment sales agreements is also excluded.

Note: Installment sales and leased property coverage forms cover this type of property.

AAIS Installment Sales Coverage Form

ISO Installment Sales and Leased Equipment Coverage Form

b. Motor vehicles, aircraft, and watercraft and their contents. However, there is coverage if the items could be considered part of the covered property described above. Examples of this exception could be an aircraft model or an aircraft or auto used as a theatrical prop.

Note: Aircraft and watercraft are properly covered under aircraft, boat, yacht, or watercraft coverage forms, and policies. Motor vehicles are properly covered under commercial auto coverage forms and policies.

c. Accounts, bills, currency, deeds, money, notes, securities, and evidence of debt

Note: This property is a mix of property that should be covered under commercial crime, accounts receivable, and valuable papers coverage forms.

ISO Accounts Receivable Coverage Form Analysis

ISO Valuable Papers Coverage Form Analysis

ISO Commercial Crime Coverage Forms and Policies Analysis

d. Jewelry, costume jewelry, precious stones, semi-precious stones, gold, silver, platinum, or other precious metals or alloys

Note: There is no exception for costume jewelry used as props.

Note: Jewelers Block coverage forms and policies cover this type of property.

ISO Jewelers Block Coverage Form

Jewelers Block Policy

AAIS Jewelry Dealers Coverage

ISO Jewelers Block Coverage Form

e. Furs or fur garments

Note: Furriers Block and Furriers Customers coverage forms and policies cover this type of property.

Furriers Block Policy

Furriers Customers Custody Policy

ISO Furriers Block Coverage Form

ISO Furriers Customers Coverage Form

f. Paintings and other works of art

Note: Fine Arts coverage forms insure this type of property.

AAIS Fine Arts Coverage Forms

ISO Commercial Fine Arts Coverage Form

ISO Fine Arts Dealers and Galleries Coverage Form

ISO Fine Arts Museums Coverage Form

g. Contraband. Any property that is illegal for the named insured to own or in illegal trade or transportation is not covered.

h. Paved surfaces

Examples provided are roadways, walks, patios, and bridges.

i. Costs to excavate, grade, fill, or backfill

j. The Foundations of buildings, structures, machinery, or boilers but only when below the lowest basement floor or below the ground’s surface when there is no basement

k. Land, water, growing crops, and lawns

The land on which the property is located is specifically not covered along with all of the other items stated.

l. Bulkheads, pilings, piers, wharves, or docks.

m. Retaining walls

Retaining walls that are a part of a covered building are covered but retaining walls that are not are not covered.

n. Underground drains, pipes, or flues

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 listed in the exclusions section.

4. Additional Coverages

Some of the following additional coverages are in addition to the limits of insurance.

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:

The amount that is paid for direct physical loss or damage to covered property
The deductible that applies to such direct physical loss or damage

Payments under this Additional Coverage do not increase the limit of insurance that applies. 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 to remove, restore, or replace polluted land or water.

b. Preservation of Property

Covered property may have to be moved from a premises described on the Declarations in order to keep it from being damaged 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 30 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 only property insured is covered property at a location listed on the declarations. Property eligible for coverage moved from a location that is not covered does not create coverage.
The potential loss or damage from which the property is being protected must be a covered cause of loss.

Covered property is covered for ANY cause of loss while it is being moved to and from (and while at) the "safe" location.

The property removed must be moved back to the covered location or the temporary location must be added to the policy within 30 days from the date of the move. Otherwise, all coverage ends after 30 days.

Example: WXYZ Radio is a news, weather, sports, and talk radio station located outside a large city on the Great Plains. Its news and weather center becomes aware of a massive storm front moving in, with major straight-line winds, tornadoes, sleet, and hail. The area is under unprecedented weather warnings and is ordered to virtually shut down. WXYZ decides to detach and remove as much of its portable and removable outdoor fixtures, satellite dishes, and communications equipment as possible, put it all on leased trucks, take it to a warehouse in the city, and keep it there until the storm passes. This additional coverage applies to the fixtures, dishes, and equipment while in transit to and from the temporary storage location in addition to coverage on this property while at the location itself. As an additional bonus, the property covered under this additional coverage is not subject to any of the exclusions in the coverage form.

c. Pollutant Clean Up and Removal

The insurance company pays to clean up pollutants caused by or that result from a covered cause of loss that occurs during the policy period. The most paid is $10,000 per premises 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 extracting process of pollutants from either land or water.

Example: WXYZ does everything it can in the face of the oncoming storm, but it cannot do everything. It has a small metal building on the premises that contains small tanks of solvents, motor oil, and lubricants it uses to service its fleet of new vehicles. The force of the wind collapses the building, the tanks overturn, and their contents pour out onto the ground. The spill spreads and pollutes the land, but the volume of spilled liquid is fairly small and so is the affected area. WXYZ's employees are able to control the area and keep it from spreading any further. This additional coverage pays the costs to clean up the spilled pollutants and to extract them from the affected area of land. However, WXYZ must pay the costs of subsequent testing for any lingering effects from the spill.

d. 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. This limit can be increased. It 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 it either contractually assumes before a loss occurs or that a local ordinance or law requires. This additional coverage is not subject to any deductible.

This limit is an additional amount of insurance.

e. Limited Coverage for Fungi, Wet Rot, and Dry Rot

(1) Coverage applies only if the fungus, wet rot, or dry rot results from a specified cause of loss or flood if flood coverage is provided. Fire and lightning losses are excepted from B. Exclusions 1. Primary Exclusions d. Fungi, Wet Rot, and Dry Rot. As a result, this Additional Coverage excludes losses that result from them.

This coverage also applies only if the named insured takes all reasonable steps to prevent further damage to property during or following a loss.

(2) Loss or damage includes more than the direct damage to the property by the fungus, wet rot, or dry rot. It also includes the costs to remove them, as well as the costs to tear out and replace walls and other parts of the building to gain access to the problem area. Any testing necessary to verify the property is clean and the situation mitigated is also covered.

(3) The limit of insurance for this coverage is an aggregate limit of $15,000 per policy year. This means that the limit for the policy year is $15,000, regardless of the number of locations and occurrences. There is no additional limit available once the limit is exhausted. If the condition continues over multiple policy years, the limit available in the policy year when the loss occurred that caused the fungus, wet rot, or dry rot is the only limit that applies.

The limit can apply per premises but is still subject to the aggregate limit per policy year. This option is available if it is selected on the declarations.

(4) The $15,000 limit is a sub-limit. It does not increase the limit of insurance.

(5) If business income and/or extra expense coverage is provided, this Additional Coverage provides coverage in two different situations:

Coverage applies for 30 days if the direct damage loss caused by a specified cause of loss does not result in a business income or extra expense loss but the fungus, wet rot, or dry rot loss does.
The direct damage loss caused by a specified cause of loss may result in a business income or extra expense loss. In that case, this Additional Coverage provides 30 additional days of coverage for the delays or extension of downtime due to the fungus, wet rot, or dry rot.

Example: The storm strikes the WXYZ transmitting equipment building that houses most of its transmitting equipment and badly damages the building and much of the equipment and other covered personal property inside. The employees are not permitted in the building because of a fear that it might collapse. Some of the property develops mold because the employees could not clean up the water quickly. The cost to mitigate and remove mold is covered, subject to this coverage's sub-limit of insurance.

5. Optional Coverages

a. Buildings

Covered property is broadened to include building but only if there is a limit of insurance for it on the declarations and the property is not otherwise covered under the Property Not Covered section.

Building is the building listed and described on the declarations. It is also completed additions, indoor and outdoor fixtures, and machinery and equipment that have been permanently installed in that building.

Owned personal property used to maintain and service the building itself or the premises is also considered building. Examples are fire extinguishing equipment, outdoor furniture, floor coverings, and refrigerating, ventilating, cooking, dishwashing, and laundering appliances.

The following are also considered building, but only when other insurance does not cover them:

· Additions under construction

· Alterations and repairs to the building or structure

· Materials, equipment, supplies, and temporary structures. These are building only if they are on the premises or within 100 feet of it and are to be used to make additions, alterations, or repairs to the building or structure.

Note: The previous edition of IH 00 77 included Optional Coverage–Extra Expense. This 06 14 edition does not. The revised 06 14 edition of IH 99 28–Business Income and Extra Expense now provides this option. It also adds definitions for Computer Equipment, Data, and Media that correspond with the coverage in
IH 00 77.

b. Replacement Cost

Replacement cost replaces actual cash value in the valuation condition in the Commercial Inland Marine Conditions, but only for this optional coverage. Replacement cost does not include a deduction for depreciation. Replacement cost does not apply to personal property of others, contents of a residence, manuscripts, works of art, antiques, or rare articles. It also does not apply to stock unless the box on the declarations is checked to include stock.

The named insured has the option to make a claim initially for actual cash value instead of replacement cost. This allows the named insured to obtain a monetary settlement to start rebuilding. It can then make a replacement cost claim later. This option of a second claim is permitted only if the named insured notifies the insurance company, within 180 days of the loss, that it will be doing so.

Replacement cost is paid only after the property is repaired or replaced and then only if the repair or replacement was handled within a reasonable amount of time. If both conditions are not met, the claim is paid as actual cash value.

The replacement cost based payment will be no more than the least of the following:

The limit of insurance for the property
The cost of replacing the property with other property that is of comparable quality material that is used for the same purpose and doing so at the same premises.
The amount the named insured actually spent in the repair or replacement of the property.

The property is not required to be built at the same premises but payment is limited to no more than what it would have cost to build at the same premises.

Any cost to repair or replace must not include ordinance or law enforcement increases.

Tenants’ improvements will be replaced as described above. However, when tenants’ improvements and betterments are not repaired or replaced on a timely basis, the value of tenants’ improvements or betterments is not on an ACV basis but instead is on a proportion of their original cost to the named insured. E. Additional Conditions
1. Valuation of Improvements and Betterments explains this proportional method. However, the insurance company never pays for any loss or damage to tenants’ improvements and betterments if other parties pay for the repairs or replace the property.

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 that 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.

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.

d. Fungi, Wet Rot, and Dry Rot

This is loss or damage caused by or that results from the existence or any activity of fungus, mold, rot, and other similar growing organisms. However, if the existence of one of these causes a specified cause of loss to occur, coverage applies to the loss or damage caused by that specified cause of loss.

This exclusion does not apply if the fungus, mold, rot, or similar organisms result from a fire or lightning loss. It also does not apply to coverage that 4. Additional Coverage e. Limited Coverage for Fungus, Wet Rot, and Dry Rot provides.

Note: The definition of Fungi in F. Definitions lists some items that Fungi includes.

e. Virus, Bacterium, or Other Microorganism

Virus, bacterium, or other microorganism means any of these that induces (or is capable of inducing) any physical distress, illness, or disease. This exclusion does not apply if the loss or damage is caused by or results from fungi, wet rot, or dry rot.

This exclusion, or the application of its terms to a specific loss, is not intended to create coverage for any loss otherwise excluded. It also applies to all coverages that this coverage form includes, including forms and endorsements that cover business income, extra expense, or acts of civil authorities.

2. Secondary Exclusions

The second group of exclusions applies to loss or damage caused by or that result 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. 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.

b. Unexplained disappearance

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

c. Shortage found upon taking inventory

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

d. Dishonest or criminal acts

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.

e. Processing or work upon the property

Loss or damage caused when covered property is being processed or worked upon is not covered. This applies regardless of who is doing the processing. There is one exception. If a fire or explosion results from such work or processing of covered property, any damage to covered property caused by that fire and explosion, is covered but only if the fire or explosion is otherwise covered under this form.

f. 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:

Networks, devices, systems, wires, or appliances of an electrical or electronic nature
Cellular or satellite devices, appliances, systems, or networks

Examples of this excluded energy are electrical current, charges a magnetic or electromagnetic field produces, and microwaves but are not limited to just these. There are two exceptions:

If the energy described in this exclusion results in a fire or explosion, coverage applies to the direct loss or damage that fire or explosion causes, but only if the fire or exploration are considered covered causes of loss under this coverage form.
The exclusion applies only to the particular item in which the disturbance occurs

g. Voluntary parting

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

h. Unauthorized instructions

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

i. 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.

j. Theft

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 that is 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 a 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 a loss or damage caused by hidden or latent defects in the property.

c. Mechanical breakdown

This is loss or damage caused by or that results from machines, tools, or mechanisms failing to operate or function properly.

d. 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.

e. Corrosion, rust, dampness, or extremes of temperature

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

Notes:

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

Dampness and temperature extremes can affect the oxidation process that affects different forms of property. They 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. Earthquake and Water Damage have separate sub-limits of insurance.

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 limit of insurance that applies) 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.

Water Damage and Earthquake have separate deductibles. All earthquake shocks that occur within 168 consecutive hours after the initial earthquake are treated as a single earthquake event and therefore subject to only a single deductible.

Examples:

· The loss is $7,500 and the deductible is $10,000. There is no payment.

· The loss is $10,000 and the deductible is $5,000. The amount paid is $5,000.

· The limit of insurance is $1,000,000. The loss is $1,110,000, and the deductible is $5,000. The full $1,000,000 limit is paid because the loss exceeds the deductible, and the amount of loss is more than the limit of insurance.

Note: All examples assume that the coinsurance clause does not apply.

Example: The initial policy period is 06/01 to 06/01, and that policy is renewed. The first earthquake shock occurs on 05/31. The named insured’s brick veneering falls off following an aftershock that occurs on 06/02. This loss is combined under the initial 06/01 to 06/01 policy period because it is within 168 hours of the first earthquake shock and subject to the same deductible.

E. Additional Conditions

1. Valuation of Improvements and Betterments

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

If there is a covered loss or damage to the named insured’s improvements or betterments it added to a building it leases, the insurance company pays the actual cash value of the property if named insured repairs or replaces it at its own expense and within a reasonable period of time after the loss.

If the named insured does not repair or replace the improvements and betterments, payment for the loss is based on a percentage of the property’s original cost. The percentage is calculated as follows:

Step 1: Determine the number of days from the date of loss to the lease's expiration date. The expiration date is considered the end of the renewal option period if there is one.

Step 2: Determine the number of days from the date the improvements and betterments were installed to the lease's expiration date. The expiration date is considered the end of the renewal option period if there is one.

Step 3: Divide Step 1 by Step 2.

Step 4: Multiply the original cost of the improvements and betterments that sustained loss or damage by Step 3.

Example: WXYZ rents the building that houses its broadcast studios. It has to add many features to this building that were unique to studio and broadcast facilities. It paid $100,000 to do so. A windstorm destroys this location, and WXYZ decides to purchase its own building instead of continuing to rent. WXYZ will not repair or replace the improvements and betterments. As a result, its loss is calculated as follows:

Step 1: The date of loss is 05/10/2021. The term of the lease is 01/01/2019 to 12/31/2024, with renewal options to 12/31/29. The number of days from 05/10/2021 to 12/31/2029 is 2,791.

Step 2: The lease inception is 01/01/2019, and the lease with renewal option is 12/31/2029. The total number of days is 3,649.

Step 3: 2791/3649 = .765

Step 4: $100,000 X .765 = $76,500

WYYZ receives $76,500

2. Other Conditions

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

c. Changes to property

It is not uncommon for a variety of devices to be attached to an antenna or tower. These devices may be owned by the named insured or be owned by others with the space on the tower or antenna being leased to that other. The addition of these devices could impact the stability of the tower or antenna, so this condition is added.

Towers and antennas are not covered if their character or construction changes because of additional equipment being added to them.

The one exception to this prohibition is when the insurance company is notified of the change and, in writing, approves.

F. Definitions

There are five definitions.

Note: The previous edition of IH 00 77 had eight definitions. This 06 14 edition deleted the exclusions for Computer Equipment, Data, and Media. The revised 06 14 edition of IH 99 28–Business Income and Extra Expense now provides Extra Expense coverage. It also adds definitions for Computer Equipment, Data, and Media that correspond to the coverage in IH 00 77.

1. Fungi

These are any type or form of fungus. Fungi include mold, mildew, mycotoxins, spores, scents, or any by-product that fungi produce or release.

2. Period of restoration

The period of time that starts on the date a covered loss occurs at a covered location. It ends on the date that the damaged property should have been repaired, rebuilt, or replaced with the property of similar quality if it was handled in a timely matter.

3. 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.

4. Stock

Merchandise that is held for sale or in storage. Raw materials, goods being manufactured, and finished goods are also stock. The supplies that are used to pack and ship stock are also stock.

5. Water Damage

This is all of the following:

a. Flood, surface water, waves, tides, tidal water, tidal waves, tsunamis, overflow of any body of water (including spray from any of these), all whether wind driven or not. It includes storm surge.

b. Mudslide or mudflow

c. Water that backs-up, overflows, or in any way discharges from a sewer, drain, sump, sump pump, or any related equipment.

d. Water that is below the surface of the ground and exerts pressure on (or flows or seeps through) foundations, walls, floors, paved surfaces, paved or unpaved basements, doors, windows, and other openings

e. Waterborne material that is moved or carried in any way by any of the above

ENDORSEMENTS

ISO has not developed any specific endorsements for exclusive use with the Radio and Television Towers and Equipment Coverage Form. ISO has developed five other endorsements that can be used to respond to specific situations.

IH 99 14–Mortgageholders

This endorsement is used to outline the rights and duties of the mortgagee when the covered property is subject to a mortgage.

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 21–Ordinance or Law Coverage

This endorsement adds coverages that respond to losses as a result of enforcing ordinances or laws that regulate demolition and/or restoration of a building or structure after direct physical loss or damage to another part of the building or structure. It includes three separate coverages.

Coverage A applies to the loss in value of the undamaged portions of a building if a law or ordinance requires that it be demolished after direct physical loss or damage to another part of the building. This coverage insures the loss in value of the undamaged portion of the building.
Coverage B covers the costs to demolish the undamaged portions of the building.
Coverage C covers the increased expenses to repair, replace, reconstruct, or remodel the damaged or undamaged parts of the building so it complies with current building, zoning, or land use laws and ordinances.

IH 99 22–Loss Payable

Loss payees with 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.

IH 99 28–Business Income and Extra Expense Coverage

This coverage form insures business income and extra expense and is used in conjunction with non-filed inland marine coverage forms.

UNDERWRITING CONSIDERATIONS

Radio and television towers and equipment are at fixed locations and are exposed to the common causes of loss that affect fixed or permanent locations. Underwriting, therefore, requires evaluating the physical features and considerations at such fixed locations and determining if management has taken the necessary steps to maintain and protect the property.

This property presents both high values in the towers and equipment that are sensitive and subject to damage from numerous causes of loss. Evaluating the causes of loss must be combined with reviewing the protective devices and services used to protect the equipment from loss.

Towers (especially taller towers) are the most visible structures at these facilities. They are subject to wind and windstorm, collapse, lightning strikes, and accumulations of ice that could lead to collapse. The tower’s age, the support and grounding, the materials used to build it, the maintenance and upkeep over the years, and the number and type of additions to it (such as antennas and dishes) are critical elements that must be evaluated. The building that houses the transmitter equipment must be evaluated from the standpoint of fire. Construction should be better than average, automatic sprinklers should be provided, and an adequate number of dry chemical extinguishers should be on hand. Water can seriously damage transmitter equipment, and this equipment should be located above grade level or above the floor. Smoke, dust, electrical arcing, and other damage can also seriously damage this equipment.

Adequate financial strength for risks in this class of business is essential. Towers and equipment require regular preventive and other maintenance. Lack of sufficient financial resources could mean deferred maintenance that leads to a catastrophic tower collapse or electrical failure of state-of-the-art equipment.

Broadcast towers are the primary underwriting concern. Tall towers are more susceptible to climatic conditions that can lead to collapse. The tower’s age and metal fatigue that occurs over time are factors that must be considered. Regular painting and metal stress testing (along with repair and replacement as needed) are essential. If additional property such as antennas and satellite dishes are added to a tower, the additional weight and imbalance can affect its structural integrity. Such common “add-ons” must not exceed the tower’s design and weight-bearing capacity. If the "add-ons" belong to other parties, the contractual arrangements between the parties must be reviewed to determine who insures them.

Isolated "repeater" towers (those that simply retransmit a signal from an originating tower) and the equipment building usually found at their bases present other issues and concerns because they do not usually have any persons or operators on the premises. The owner must visit them regularly to identify problems and resolve them quickly. The tower property should be completely fenced and the building properly constructed, locked, and secured against break-ins, theft, and vandalism. All required steps to deter unauthorized access to the premises should be taken, especially with facilities that are not usually occupied.

Mobile, sophisticated electronic equipment is very susceptible to both damage and theft. Equipment should never be left in an unlocked and unattended vehicle. Equipment should be individually assigned to employees who are held financially responsible for loss or damage to it. Equipment should never be loaned or leased to outsiders unless the arrangement calls for them to insure the property. If the equipment is part of an equipment pool, there must be a reliable sign-out and tracking procedure in place to monitor the location and status of all equipment and hold employees responsible for the property if it is damaged or stolen.