The American Association of Insurance Services (AAIS) Sign Coverage is used to insure signs that are automatic, electric, fluorescent, mechanical, or neon. Lamps and street clocks can also be covered using this form. Data processing equipment that is used to support the signs, lamps, or street clocks is also covered.

The property can be covered on a blanket or scheduled basis.

ELIGIBILITY

Signs that are automatic, electric, fluorescent, mechanical or neon are eligible to be covered by this form. Lamps and street clocks can also be covered. Any data processing equipment that supports signs, lamps or street clocks can also be covered.

Billboards or ordinary fixed signs are not eligible to be covered by this coverage form when illuminated by electric lights.

HealthClubSign

An example of an ineligible property

POLICY CONSTRUCTION

AAIS Sign Coverage requires at least these four forms:

IM 7900–Inland Marine–Declarations
CL 0100–Common Policy Conditions
Related Article: CL 0100 AAIS Commercial Lines Common Policy Conditions IM 1455–Schedule of Coverages–Signs
IM 1450–Sign Coverage

IM 1455–SCHEDULE OF COVERAGES–SIGNS

This Schedule of Coverages is used with IM 1450–Sign Coverage. IM 1455 contains the following information:

Scheduled Signs

Each covered sign must be listed with an item number, its location, and a description. A limit must be shown beside each listed sign.

Unscheduled Signs

This section can be used when all signs at a specific location are to be covered. The location number and a description of the location is entered. The limit entered applies to all signs that are at that location.

A space is also available for a catastrophe limit to be displayed. This catastrophe limit applies only to the unscheduled signs and does not impact the scheduled signs.

If there is no catastrophe limit, an entry to that effect must be entered in the space provided.

Deductible

The deductible is expressed as a percentage of the limit. The standard deductible is 5%. The selected percentage must be entered in the space provided.

If minimum and maximum dollar deductible amounts apply, those amounts must be entered in the spaces provided.

Note: The deductible is per occurrence not per sign.

Examples:

Scenario 1: Harry’s Haberdashery’s scheduled signs limit is $10,000, subject to a 5% deductible. A covered loss that occurs results in total damages of $1,329. The dollar amount of the deductible is .05 X $10,000 = $500. As a result, Harry receives $829 ($1,329 - $500).

Scenario 2: Harry’s Haberdashery has three locations. Each location has a $30,000 limit for all signs. The deductible is 5%. A tornado destroys signs at all three locations. The limit is $30,000, and the deductible at each location is $1,500, for a total deductible of $4,500. Fortunately, Harry’s insurance agent insisted on a $100 minimum and $1,000 maximum deductible. This saves Harry $3,500.

Rates and Premium

Sign coverage is written on a non-reporting basis. This section has spaces to enter the annual premium and the non-reporting rate per $100 that applies.

IM 1450–SIGN COVERAGE ANALYSIS

This analysis is of the 01 05 edition.

Agreement

This section states that the insurance company provides the coverage described in return for the named insured paying the required premium. This agreement is subject to all the coverage form’s terms, the schedule of coverages, and any additional conditions that apply. Endorsements or additional schedules identified on the schedule of coverages also apply.

A statement that certain words and phrases identified in bold print in the coverage form are defined in the Definitions section immediately following this Agreement.

Note: There is no marked space on the schedule of coverages to list endorsements or additional schedules that apply at inception.

Definitions

Defined words are used throughout the coverage form. When these terms are used in the coverage form, the meaning provided in this section must be applied. Nine terms are defined:

1. You and your

The parties that are specifically named on the declarations as insureds.

2. We, us, and our

The insurance company that is providing the coverage.

5. Limit

The amount of coverage that applies.

Note: There is no reference as to what it applies; it just applies.

6. Pollutant

This is a broad and expansive term. It is solids, liquids, thermal or radioactive contaminants, and irritants. It includes, but is not limited to, acids, alkalis, chemicals, fumes, smoke, soot, vapor, and waste. Waste includes materials intended for recycling, reclamation, and reconditioning, as well as for disposal. Visible and invisible electrical or magnetic emissions and sound emissions are also considered pollutants.

7. Schedule of coverages

Any page labeled as such contains coverage information, including declarations or supplemental declarations.

8. Sinkhole collapse

The earth’s surface suddenly settling or collapsing into an underground opening created by water acting on limestone or some other rock formation. The sinkhole collapse does not include either the land’s value or the cost to fill sinkholes.

9. Specified perils

The named perils of aircraft, civil commotion, explosion, falling objects, fire, hail, fire extinguishing equipment leakage, lightning, riot, sinkhole collapse, smoke, sonic boom, vandalism, vehicles, volcanic action, water damage, the weight of sleet, snow or ice and windstorm. Two terms need further explanation.

Falling objects does not include loss to personal property stored in the open. It also does not include damage to the interior of buildings or personal property stored in buildings unless a falling object first breaches the building's exterior.

Water damage is the sudden or accidental discharge or leakage of water or steam. However, it must directly result from a part of the system or appliance that holds the water or steam cracking or breaking.

10. Terms

These are all provisions, limitations, exclusions, conditions, and definitions that apply to this coverage.

11. Volcanic action

An airborne volcanic blast or shock wave. It is also ash, dust, particulate matter, and any lava flow. The term does not include the cost of removing dust, ash, or particulate matter from the covered property unless there is direct physical damage to the property.

Sign144

Example of an automatic sign

Property Covered

The insurance company covers property that is described below unless it is excluded or subject to limitations.

1. Scheduled Signs

a. Coverage

Direct physical loss to signs that are described on the schedule of coverages is covered.

b. Coverage Limitations

Coverage applies only if a limit is entered for scheduled signs.

Note: There is no reference to item number or that limits are to be entered for a specific sign.

Signs are covered only while in transit between scheduled locations or while at a scheduled location.

Note: The limitation does not explain what limit applies while a sign is in transit between locations.

Editorial note: The type of coverage being provided in this section is unclear. Does the limit scheduled apply to only one sign or can multiple signs be covered at that location? The limitation does not mention items but instead refers to locations. The ambiguity within the coverage limitations should work to the advantage of the named insured.

100_8950

2. Unscheduled Signs

a. Coverage

Direct physical loss to unscheduled signs is covered when it results from a covered peril. Such loss to similar property of others in the named insured's care, custody, or control is also covered.

b. Coverage Limitations

There are three coverage limitations:

A limit must be entered for unscheduled signs. This limit is entered by location.
Coverage applies only at a location entered on the schedule of coverage or while the sign is moving between those locations.
Signs that are automatic, electric, fluorescent, mechanical, or neon signs are covered, as well as lamps and street clocks. Data processing equipment used in the signs' operation is also covered.

Note: The data processing equipment is specific to only those with the signs, which means that such equipment used with lamps or street clocks is not.

Property Not Covered

There is no coverage for the following property:

Contraband

Property that is illegal to possess is not covered. Property that is legal to possess but being used as part of an illegal trade or being transported illegally is also not covered.

Perils Covered

Coverage applies to risks of direct physical loss unless the loss is limited or an excluded peril causes the loss.

Other Coverages–Collapse

1. Coverage

Loss to covered property when caused by a direct physical loss that involves the collapse of a building or structure or any part of a building or structure containing covered property.

2. Covered Perils

The only collapse coverage provided is collapse caused by one or more of the following:

One of the specified perils or breakage of building glass, to the extent that this coverage form insures those perils.

Hidden decay. This does not apply if the named insured was aware of the decay before the collapse.
Hidden insect or vermin damage. This does not apply if the named insured was aware of the damage before the collapse.
Weight of people or personal property. There is no statement as to where the people or personal property must be.
Weight of rain. This is limited to only that rain that collects on a roof.
Using defective materials or methods of construction, remodeling, or renovation. This applies only if the collapse occurs during any of these operations.
Suppose the collapse occurs after construction, remodeling, or renovation are complete and defective materials or methods of construction, remodeling or renovation is partially to blame. In that case, coverage applies if any of the others contributed to the loss.

3. Collapse Means

A collapse is the sudden and unexpected falling in or caving in of a building or structure (or any part of it) that prevents the building from being occupied for its intended purpose.

4. Collapse Does Not Mean

The following buildings and structures are not considered to be in a state of collapse:

One that is still standing or any portion of it that is still standing. This applies even when there is evidence of bending, bulging, cracking, expanding, leaning, sagging, settling, or shrinking.
One in danger of falling in or caving in
When a portion is still standing even though it is separated from another portion of the building or structure

5. Coverage Limitation

This coverage does not provide any increase in the limit for the covered property.

Perils Excluded

1. Primary Exclusions

The first group of exclusions is essentially absolute. Subject to specific exceptions, loss or damage by 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 these events.

a. Civil Authority

There is no coverage for loss that results from an order any civil or government authority issues. These orders may include seizure, confiscation, destruction, or quarantine of property but this exclusion is not limited to only these. The only exception is when a civil authority destroying property as a means of controlling a fire causes the loss or damage. This exception applies only if the fire is the result of a covered peril.

b. Nuclear Hazard

The insurance company does not insure against loss or damage from any nuclear reaction, radiation, or contamination, whether the nuclear incident was controlled or not or was caused by any means. Any loss caused by the nuclear hazard is not treated as a loss caused by fire, explosion, or smoke. However, coverage applies to direct loss or damage caused by fire that results from the nuclear hazard.

c. War and Military Action

The insurance company does not pay for loss or damage caused by any act of war. Undeclared and civil war or warlike action by a military force are all considered war. All actions taken to hinder or defend against an actual or expected attack by any government or sovereign authority that uses military personnel or other agents are also considered war and excluded. In addition, acts of insurrection, rebellion, revolution, or unlawful seizure of power and any action any government authority takes to prevent or defend against any such acts are excluded. If any action within the terms of this exclusion involves nuclear reaction, radiation, or contamination, this exclusion applies in place of the nuclear hazard exclusion.

Note: This means that the exception for resulting fire under the nuclear hazard is not covered when it is the result of 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 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 results from any of these events.

a. Acts or Decisions

There is no coverage for loss caused by or resulting from any acts or decisions by any person, organization, or government entity. This also includes failing to act or decide.

This exclusion has an exception. The act or decision, or the failure to act or decide, may result in a covered peril. In that case, the loss or damage that peril causes is covered.

b. Breakage

Property that breaks while in transit or during the installation, dismantling or repair process is not covered.

Example: Just Wait Now is moving a sign from one covered location to another.

Scenario 1: Justin turns his back at a crucial point of the dismantling, and the sign falls and shatters on the ground. The loss is not covered because it occurred during the dismantling process.

Scenario 2: Larry is driving the truck with the sign attached to it. The truck is sideswiped, and the sign destroyed. Coverage applies because the entire sign is destroyed in a car accident.

Scenario 3: The sign arrives at the new location, and the installation is complete when a windstorm occurs that breaks the sign. The breakage damage is covered because it occurs after the transit and installation have been completed.

c. Collapse

Loss caused by collapse is excluded.

This exclusion has two exceptions.

The collapse coverage provided in Other Coverages- Collapse
When an excluded collapse results in a covered peril, coverage applies to the loss or damage that covered peril caused.

d. Contamination or Deterioration

Loss or damage that is caused by contamination or deterioration is excluded. This applies to corrosion, decay, fungus, mildew, mold, rot, and rust. It also applies to any quality, fault, or weakness in covered property that causes it to damage or destroy itself. However, this exclusion is not limited to only these described causes. This exclusion has an exception. When contamination or deterioration results in a covered peril, the loss or damage that covered peril causes is covered.

e. Criminal, Fraudulent, Dishonest, or Illegal Acts

Coverage does not apply to loss caused by or that results from criminal, fraudulent, dishonest, or illegal acts, committed by any of the following alone or in collusion with another:

The named insured
Others with an interest in the property
Others to whom the property has been entrusted.
The named insured's partners, officers, directors, trustees, joint venturers, members, or managers, as applicable, based on the named insured’s type of business organization.
Employees of any of the groups listed above. Employees are excluded even if the act occurs when they are not considered to be working.

Coverage applies if employees destroy property. It does not apply if employees steal.

This exclusion does not apply to covered property in the custody of a carrier for hire.

f. Electrical Currents

There is no coverage for loss or damage that is due to artificially generated electrical currents damaging electrical apparatus or wiring that is inside the insured property. This exclusion applies only to the property that artificially generated the current.

This exclusion has an exception. Electrical currents may result in a fire or explosion. In that case, the loss or damage caused by the fire or explosion is covered.

Example: Justin forgets to shut off an attached sign one night after closing, and a power surge causes it to short out and start a fire. The fire causes quite a bit of damage before it is extinguished. The short circuit is not covered, but the loss is covered because the fire destroys the sign.

g. Fault, Defect, or Error

Loss or damage due to errors, faults, or defects in planning, zoning, surveying, site plans, grading, compacting, land use, or development is not covered. Loss or damage due to property related design, blueprint, specification, workmanship, building, maintaining, installing, renovating, remodeling, or the repairing errors, faults, or defects are also excluded.

An important provision is that this exclusion applies both on and away from the designated premises and applies regardless of negligence.

This exclusion has an exception. One of these events may result in a covered peril. In that case, the loss or damage that peril causes is covered.

h. Loss of Use

There is no coverage for a loss resulting from delay, loss of use, or loss of market.

Example: Justin is pleased to learn his sign is covered. However, he becomes upset when the Board of Health shuts down his restaurant for a week until the fire damage is cleaned up and his operation receives a "clean bill of health." His loss of business income during that time is not covered because of this exclusion.

i. Mechanical Breakdown

Loss that is due to mechanical breakdown is excluded. The only exception is that when such an excluded loss causes a covered peril, then the resulting loss from that covered peril is covered.

j. Pollutants

There is no coverage for loss caused by or resulting from any release, discharge, seepage, migration, dispersal, or escape of pollutants. here are two exceptions:

A specified peril causes the event.
When a pollutant release results in a specified peril, the loss from that specified peril to covered property is covered.

k. Temperature or Humidity

Coverage is not provided when dryness, dampness, humidity, or changes and extremes of temperature cause or result in loss or damage to covered property.

This exclusion has an exception. If any of the above results in a covered peril, the loss or damage from that peril is covered.

l. Unauthorized Instructions

Coverage does not apply if a loss occurs because the property was given to another person or sent to another place based on unauthorized instructions.

m. Voluntary Parting

There is no coverage for loss to covered property voluntarily given to others, even if the surrender was due to a fraudulent scheme, trick, or false pretense.

n. Wear and Tear

Loss or damage caused by wear and tear is excluded.

This exclusion has an exception. Wear and tear may result in a covered peril. In that case, the loss or damage that peril causes is covered.

o. Weather

Loss or damage due to weather conditions is excluded but only when the loss is caused by a weather condition combined with a cause of loss excluded in 1. Primary Exclusion above.

This exclusion has an exception. The weather conditions may result in a covered peril. In that case, the loss that peril causes is covered.

What Must Be Done In Case Of Loss

1. Notice

The named insured must promptly notify the insurance company or its agent of a loss. The notice must include a description of the property lost or damaged. If a criminal act caused the loss, the appropriate law enforcement agency must also be notified. The insurance company has the right to require that any notice to it be in writing.

2. You Must Protect Property

During and after a loss, the named insured must take all reasonable steps to protect covered property from further loss. The insurance company pays reasonable costs the named insured incurs if the named insured maintains accurate records to substantiate the expenses. Paying these costs is not in addition to the policy limits. There is no coverage for any repairs or emergency measures performed on property not already damaged by a covered peril.

Note: It is important to realize that any such costs incurred will reduce the amount available to pay the actual loss.

3. Proof of Loss

The named insured must complete and return the insurance company's prescribed proof of loss forms within 60 days after the company requests it. The information provided must include the time, place, and circumstances involved with the loss and information on any other insurance coverage that may apply. It must also include the named insured’s interest and the interest of others with respect to the property involved, including liens and mortgages. Any changes in the title to the property during the policy period must be disclosed, in addition to providing any other reasonable information, including inventories, specifications, and estimates the company may require in settling the loss.

4. Examination

Examining the named insured under oath may be required in matters relating to the loss. The insurance company may request these examinations more than once, but such requests must be reasonable. If multiple persons are examined, the company has the right to examine each individual separately.

5. Records

The named insured must produce any records related to the loss. The insurance company must be allowed to make copies and take extracts of them as often as it reasonably requests. Records include tax returns and bank microfilms of all related canceled checks, but records are not limited to just these.

6. Damaged Property

Damaged and undamaged property must be made available for the insurance company's inspection as often as reasonably necessary. It must also be allowed to take samples of the property and to inspect it.

7. Volunteer Payments

The named insured has the right to make payments, assume obligations, pay offer rewards, or incur other expenses. However, unless the insurance company has given written approval for such actions, the named insured cannot expect any reimbursement. The only exception is that the insurance company will pay for the costs incurred to protect property as described in item 2 above.

8. Abandonment

The insurance company decides when and if it will take ownership of the named insured’s property. The named insured is, therefore, not permitted to abandon damaged property to the insurance company until the insurance company agrees in writing to accept it.

9. Cooperation

The named insured must cooperate with the insurance company. Any actions required of the named insured within this policy must be performed.

Valuation

1. Actual Cash Value

The valuation of covered property is subject to 2., 3., and 4. below.

The value of covered property is its actual cash value at the time of loss. Actual cash is replacement cost new minus depreciation.

2. Scheduled Property

The value of scheduled covered property is the limit displayed for that item on the schedule of coverages.

Note: This is standard wording for scheduled property. However, it does not mesh with some of the coverage explanations provided, especially regarding signs in transit and those moving between locations.

3. Pair or Set

The value of a loss that involves damage or loss of one part of a pair or set is based on a reasonable proportion of the value of the entire pair or set. However, the loss of one part of a pair or set is not considered a total loss.

Note: This recognizes that the value of the whole is greater than the value of individual parts but that the remaining parts still have value as separates.

4. Loss to Parts

The value of a lost or damaged part of the property that consists of several parts is the cost to repair or replace only the lost or damaged part.

How Much We Pay

1. Insurable Interest

The insurance company does not pay more than the named insured's insurable interest on the covered property at the time of loss.

2. Deductible

The insurance company pays only the amount of loss that exceeds the deductible amount on the schedule of coverages. This is an occurrence deductible.

3. Loss Settlement Terms

a. The insurance company pays the least of the following:

All of these are subject to items 1., 2., 4., and 5. in this section.

The amount determined based on the Valuation section.
Costs to repair, replace, or rebuild the damaged property. The material must be of like kind and quality or as similar as practicable.
The limit that applies to the damaged property.

b. Catastrophe Limit

This applies only if a catastrophe limit is entered on the schedule of coverages and only to the unscheduled sign coverage.

When a covered peril causes loss or damage at more than one premises that is listed on the schedule, the most paid in a single occurrence is the lowest of either of the following:

The total of the limits for covered property at all locations where the loss occurred.
The catastrophe limit

4. Coinsurance

This provision is limited to only the unscheduled signs. This means that scheduled signs are not subject to coinsurance. Only losses that occur at a covered premises listed on the schedule of coverages are subject to this provision.

The insurance company does not pay the full amount of any loss if the value, at the time of the loss, of all covered property (subject to coinsurance) multiplied by 100% exceeds the insurance limit. The following are the steps the insurance company takes to determine the amount it pays:

Step 1: Determine the value of items, at the time of loss, of all covered property at the loss premises that is

subject to coinsurance.

Step 2. Divide the limit for the covered property at the premises subject to coinsurance by the result determined in Step 1.

Note: Stop here if the result is 1.00 or higher because no coinsurance penalty applies. Go to Step 4 only if the result is less than 1.00.

Step 3. Multiply the total amount of loss, prior to the application of a deductible, by the percentage determined in Step 2.

Step 4. Subtract the applicable deductible from Step 3.

The insurance company does not pay more than the amount determined in Step 4 or the limit of insurance, whichever is less. It does not pay any remaining part of the loss.

Note: The schedule of coverage does not refer to coinsurance.

5. Insurance Under More Than One Coverage

Two or more coverages in the coverage form may cover the same loss. In that case, the insurance company does not pay more than the actual value of the claim, loss, or damage sustained.

6. Insurance under More Than One Policy

a. Proportional Share

The named insured may have other coverage subject to the same terms as this coverage form. In that case, this coverage form pays only its share of the covered loss. That share is the proportion that its limit of insurance bears to the limits of insurance on all insurance that covers on the same basis.

b. Excess Amount

There may be other coverage available to pay for the loss other than as described in item 5. a. above. In that case, this coverage form pays on an excess basis. It pays only the amount of covered loss that exceeds the amount due from the other coverage, whether it can be collected or not. Any payment is subject to the insurance limit that applies.

Loss Payment

1. Loss Payment Options

a. Our Options

The insurance company has four loss payment options if a covered loss occurs.

Pay the value of the property that sustained loss or damage.
Pay the cost to repair or replace the property that sustained loss or damage.
Rebuild, repair, or replace the property with similar property, to the extent possible, and it must be accomplished within a reasonable period of time.
Take any part or all of the property based on the value agreed upon or determined through appraisal.

b. Notice of Our Intent to Rebuild, Repair, or Replace

The insurance company must notify the named insured of its intent to rebuild, repair, or replace within 30 days of receiving a properly completed proof of loss.

2. Your Losses

a. Adjustment and Payment of Loss

The insurance company adjusts all losses with and pays the named insured. The only exception is when a loss payee is on the policy.

b. Conditions for Payment of Loss

The insurance company pays a covered loss within 30 days after it receives a properly prepared proof of loss, and the amount of loss is established. The amount of loss is determined either through a written agreement between the company and the named insured or after an appraisal award is filed with the company.

3. Property of Others

a. Adjustment and Payment of Loss to Property of Others

The insurance company has the option to adjust and pay losses that involve the property of others to either the named insured on the property owner’s behalf or to the property owner.

b. We Do Not Have to Pay You if We Pay the Owner

The insurance company is not obligated to pay the named insured when it pays the property owner. In addition, if the property owner sues the named insured, the company can defend the named insured in that suit.

Other Conditions

1. Appraisal

The insurance company and the insured may not always agree on a covered claim’s value. This condition provides one method to resolve disputed claims.

Either party can request an appraisal to determine a disputed claim’s value. Once requested, the parties have 20 days to obtain their own independent and competent appraisers and give their appraiser's name to the other party. The two appraisers then have 15 days to select a competent impartial umpire. If they cannot agree on an umpire within that time period, either can request that a judge in the court of record in the state where the property is located appoint one.

The appraisers then determine the claim’s value. They submit any differences to the umpire. Once any two of the three parties agree, the amount of loss is set.

Each party pays its own appraiser. Both parties share the umpire’s cost and other expenses equally.

2. Benefit to Others

The insurance provided does not directly or indirectly benefit any party with custody of the named insured's property.

3. Conformity with Statute

Any condition in this coverage form that conflicts with any applicable law is amended to conform to that law.

4. Estates

a. Your Death

This applies only when the named insured is an individual. When a named insured dies, the person who has custody of the named insured's property is an insured for that property until a qualified legal representative is appointed. Once the named insured’s legal representative is named, that person has custody but only for the property covered under this policy.

b. Policy Period is not Extended

This coverage does not extend past the policy’s expiration date.

5. Liberalization

A revision of this coverage form or an applicable endorsement that takes effect during the policy period or within six months of when this coverage takes effect may broaden coverage without an additional premium charge. In that case, the broadened coverage applies to this coverage.

6. Misrepresentation, Concealment, or Fraud

This coverage is void if any insured at any time willfully concealed or misrepresented a material fact that relates to the insurance provided, the property covered, or its interest in the property. It is also void if any insured engaged in fraud or false swearing with respect to the insurance provided or the property covered.

Note: The named insured must deal with the insurance company honestly. Its rights of recovery may be voided if it intentionally misrepresents or conceals a material fact or information. This means the insurance is treated as simply having never existed versus a particular claim being denied.

7. Policy Period

Only covered losses that occur during the policy period are paid.

8. Recoveries

Payment of the loss does not end the obligations of the named insured and the insurance company toward one another. Additional provisions apply if the insurance company pays a loss, and the lost or damaged property is subsequently recovered or the parties responsible for the loss pay for it.

Either party that recovers property or payment must inform the other. Recovery expenses that either party incurs are reimbursed first. If the named insured keeps the recovered property, it must refund the amount of the claim the insurance company paid unless the company agrees to a different amount. If the claim paid is less than the agreed loss due to applying a deductible or other limitation, any recovery is prorated between the named insured and the insurance company, based on the company's respective interest in the loss.

9. Restoration of Limits

Payment of a claim does not reduce the limit available for future claims.

10. Subrogation

The insurance company acquires the named insured's rights of recovery from third parties after it pays a loss. The named insured must help the company secure those rights. The insurance company is not obligated to pay the loss if the named insured hinders or impairs its subrogation rights.

The named insured has the right to agree in writing to waive recovery rights from any party when it does so before a loss occurs.

11. Suit against Us

The insurance company cannot be sued by anyone for any coverage until all the terms of the coverage form have been met. Suits must be brought within two years after the named insured first knew about a loss. If a state law invalidates this condition, any suit brought must comply with that law’s provisions and begin within the shortest period of time allowed by law.

Note: It is normal for a basic coverage form to be modified by mandatory state-specific endorsements that address issues that relate to that state.

12. Territorial Limits

Covered property must be in the United States of America, its territories and possessions, Canada, or Puerto Rico for coverage to apply.

ENDORSEMENTS

AAIS has developed one endorsement to use with Sign Coverage.

IM 1456–Coinsurance Provisions–Signs

This endorsement revises the coinsurance provision to be based on all premises instead of only one. All other terms and conditions remain the same.

UNDERWRITING CONSIDERATIONS

The size of the sign or signs, the general geographic location, and the specific location are all factors in underwriting sign exposures. Larger signs are obviously subject to a greater amount of damage than smaller signs. Signs located away from the main premises and not subject to daily or regular observation are more subject to loss or damage by vandalism and theft. Signs are easily damaged by windstorm and hail, and geographic issues are different from one part of the country to another. Interior signs should be underwritten as business personal property.