COMPARE: ISO BUSINESSOWNERS COVERAGES TO ISO NON-BUSINESSOWNERS COVERAGES

(September 2022)

INTRODUCTION

This analysis compares Insurance Services Office (ISO) BP 00 03–Businessowners Coverage Form 07 13 to the corresponding ISO commercial property coverage forms CP 00 10 10 12, CP 10 30 09 17, and CP 00 90 07 88 and Commercial General Liability Coverage Forms CG 00 01 07 13, IL 00 17 11 98, and IL 00 21 05 04.

PROPERTY

Covered Property

CP 00 10–Building and Personal Property Coverage Form

Coverage applies to the named insured's building and business personal property listed on the declarations and used in the business. Coverage also applies to leased personal property the named insured has a contractual responsibility to insure. Personal property of others in the named insured's care, custody, or control is also covered and must be listed and described on the declarations.

BP 00 03–Businessowners Coverage Form

Covered Property is the same as in CP 00 10 except that BP 00 03 covers the named insured’s exterior building glass or such glass in its care, custody, or control when the named insured is a tenant. In addition:

• BP 00 03 treats furniture in furnished apartments as building. CP 00 10 treats it as personal property.
• BP 00 03 automatically includes personal property of others as personal property.

Property Not Covered

CP 00 10–Building and Personal Property Coverage Form

• *Accounts, bills, currency, food stamps, evidences of debt, money, notes and securities, except lottery tickets held for sale

· Animals not boarded and not covered as stock in trade

• *Automobiles held for sale
• *Bridges, roadways, walks, patios, or other paved surfaces

· Contraband and other illegal property, including legal property in illegal transportation or trade

• *Costs of excavations, grading, filling, and backfilling
• *Foundations below the lowest basement floor or the surface of the ground if there is no basement
• Land, water, lawns, and crops not yet harvested, except lawns that are part of vegetated roofs
• *Personal property in transit by air or water conveyances
• *Bulkheads, pilings, piers, wharves, or docks
• Property better insured under other coverage forms and policies
• *Retaining walls
• Pipes, flues, and drains beneath the ground’s surface
• Electronic data
• Costs to restore information on valuable papers and records
• *Vehicles and self-propelled machines licensed for use on public roads or away from the premises
• Grain, hay, straw, and other crops
• *Fences, antennas, and towers
• *Trees, shrubs, or plants except as stock held for sale or that are part of vegetated roofs

BP 00 03–Businessowners Coverage Form

Property Not Covered is the same as in CP 00 10 except for the items above with an asterisk (*). In addition:

• The accounts, etc., restrictions are similar except that accounts receivable and valuable papers are excluded except as extensions elsewhere in the coverage form. In addition, BP 00 03 does not mention lottery tickets as either covered or excluded.
• Automobiles held for sale are not specifically excluded. However, they are excluded based on the aircraft, etc., exclusion.
• Bridges, Cost of Excavations, Foundations, Bulkheads, Retaining Walls, Pipes, etc., are not specifically excluded.
• Aircraft, automobiles, motor trucks, and other vehicles subject to motor registration are excluded. This is more restrictive than the vehicles and automobiles for sale restriction in CP 00 10.
• BP 00 03 excludes watercraft while afloat. CP 00 10 excludes only watercraft operated away from the premises.
• Fences, etc., is the same except Outdoor Signs are also excluded.
• Trees, etc., is the same except BP 00 03 does not mention such property held for sale as stock.
• Computers within aircraft, watercraft, and motor trucks are excluded except when held as stock for sale.

Additional Coverages

CP 00 10–Building and Personal Property Coverage Form and CP 10 30–Business Income (With Extra Expense)

• Debris Removal for 25% of the direct damage loss plus an additional $25,000
• Preservation of Property at other locations for up to 30 days
• Fire Department Service Charge up to $1,000 at each location regardless of the number of units that respond or services provided
• Pollutant Clean-Up and Removal up to $10,000
• Increased Cost of Construction up to $10,000
• Electronic Data up to $2,500
• Business income and extra expense coverage is provided only when there is a limit for the coverage on the declarations and CP 10 30 is attached. The following additional coverages then apply:
• Civil Authority with respect to business income and extra expense for up to four consecutive weeks
• Business income from alternations and new buildings
• Extended Business Income for up to 60 days

BP 00 03–Businessowners Coverage Form

Additional Coverages are the same as in CP 00 10 and CP 10 30 or as noted. In addition:

• Fire Department Service Charge is $2,500 at each location regardless of the number of units that respond or services provided
• Collapse coverage. See causes of loss summary below.
• Water Damage, Other Liquids, Powder, or Molten Material Damage. See causes of loss summary below.
• Business Income is not subject to a specific limit. Coverage is for the actual loss sustained for up to 12 months.
• Extra Expense is not subject to a specific limit. Coverage is for the actual necessary expenses incurred for up to 12 months.

· Money Orders and Counterfeit Money up to $1,000

· Forgery or Alteration up to $2,500

· Business Income from Dependent Properties up to $5,000

· Glass Expenses for temporary repairs or boarding up. See causes of loss summary below.

· Fire Extinguisher Systems Recharge Expense up to $5,000

· Electronic Data up to $10,000

· Interruption Of Computer Operations up to $10,000

· Limited Coverage for Fungi, Wet Rot, or Dry Rot up to $15,000. See causes of loss summary below.

Coverage Extensions

CP 00 10–Building And Personal Property Coverage Form

• Newly Acquired or Constructed Property–Buildings up to $250,000 for 30 days/Business Personal up to $100,000 for 30 days
• *Personal Effects and Property of Others up to $2,500. No theft coverage for personal effects.
• Valuable Papers and Records (Other Than Electronic Data) up to $2,500
• *Property Off Premises that is not in transit up to $10,000
• Outdoor Property up to $1,000 for limited causes of loss, limited to $250 on any one plant
• *Non-Owned Detached Trailers up to $5,000
• Business Personal Property Temporarily in Portable Storage Units up to $10,000

BP 00 03–Businessowners Coverage Form

Coverage Extensions are the same as in CP 00 10 except for the items above with an asterisk (*). In addition:

• Personal Property off Premise includes property while in transit.

• Outdoor Property limit is $2,500 for limited causes of loss, limited to $1,000 on any one plant.
• Personal Effects coverage only. Business Personal Property includes property of others.
• Valuable Papers and Records up to $10,000 at described premises and $5,000 at other premises
• Accounts Receivable up to $10,000 at described premises and $5,000 at other premises

Limits of Insurance

CP 00 10–Building And Personal Property Coverage Form

• The limit of insurance on the declarations is the most paid for loss or damage in any one occurrence.

· The limit for any outdoor sign is $2,500.

• The limits of insurance for 6. Coverage Extensions and 4. Additional Coverages c. Fire Department Service Charge, d. Pollutant Clean-Up and Removal, e. Increased Cost of Construction, and f. Electronic Data are in addition to the limits of insurance on the declarations.

BP 00 03–Businessowners Coverage Form

Limits of Insurance are the same as in CP 00 10 except for the following:

· The limit for any one outdoor sign attached to a building is $1,000.

• The building limit automatically increases 8% or by the annual percentage entered on the declarations.
• The Business Personal Property limit of insurance increases 25% (or a different percentage entered on the declarations) to allow for seasonal variations if it is 100% of the average values for each of the 12 previous months at the time of loss. If the insured was in business less than 12 months, it applies for the number of months the insured was in business.

Deductible

CP 00 10–Building and Personal Property Coverage Form and CP 00 30–Business Income (With Extra Expense) Coverage Form

CP 00 10 pays the amount of loss up to the limit of insurance after the deductible is applied. No deductible applies to 4. Additional Coverages c. Fire Department Service Charge. CP 00 30 does not have a deductible but has a 72-hour waiting period as part of the period of restoration for business income coverage and business income civil authority.

BP 00 03–Businessowners Coverage Form

Deductible is the same as in CP 00 10 and CP 00 30. In addition:

• The most deducted from loss or damage to 5. Additional Coverages k. Forgery or Alteration, G. Optional Coverages 1. Outdoor Signs, 2. Money and Securities, and 3. Employee Dishonesty is the deductible on the declarations.
• The deductible does not apply to 5. Additional Coverages c. Fire Department Service Charge
• Property Loss Conditions

Property Loss Conditions

CP 00 10–Building and Personal Property Coverage Form and CP 00 90–Commercial Property Conditions

• Abandonment

• Appraisal

· Duties in the Event of Loss or Damage

· Loss Payment

· Recovered Property

· Vacancy

· Valuation

· *Coinsurance

· Mortgage holders

• Concealment, Misrepresentation, or Fraud
• Control of Property
• Insurance Under Two or More Coverages
• Legal Action Against Us
• Liberalization
• No Benefit To Bailee
• Other Insurance
• Policy Period, Coverage Territory

BP 00 03–Businessowners Coverage Form

Property Loss Conditions are the same as in CP 00 10 and CP 00 90 except for the items above with an asterisk (*) and Resumption of Operations. In addition:

· There is no provision for a coinsurance penalty.

· Loss payment is based on replacement cost for most property. Actual cash value applies if the limit does not equal at least 80% of replacement value.

Optional Coverages

CP 00 10–Building and Personal Property Coverage Form

• Agreed Value
• Inflation Guard
• Replacement Cost
• Extension of Replacement Cost to Personal Property of Others

BP 00 03–Businessowners Coverage Form

• Outdoor Signs
• Money and Securities
• Employee Dishonesty
• Equipment Breakdown Protection Coverage

Causes of Loss

CP 00 10, CP 00 30, and BP 00 03 cover direct physical loss unless limited or excluded.

Exclusions

CP 10 30–Causes of Loss–Special Form

• Ordinance or Law
• Earth Movement
• Governmental Action
• Nuclear Hazard
• Utility Services originating off premises
• War and Military Action
• Water
• Fungus, Wet Rot, Dry Rot, and Bacteria
• Artificially generated electrical, magnetic, or electromagnetic energy
• Delay, loss of use, or loss of market
• Smoke, vapor, or gas
• Wear and tear, rust or other corrosion, smog, settling, cracking, shrinking, expanding, nesting, infestation or discharge, mechanical breakdown, dampness or dryness of atmosphere, changes or extremes of temperature, marring, or scratching. These are subject to certain limited exceptions.
• Explosion of steam apparatus and objects
• Continuous or repeated seepage or leakage of water
• Leakage of water, other liquids, powder, or molten material caused by freezing
• Dishonest or criminal acts by the named insured, its employees, etc.
• Voluntary parting
• Damage to outdoor property by rain, snow, ice, or sleet
• Collapse
• Pollutants
• Neglect
• Weather conditions
• Acts or decisions
• Faulty, inadequate, defective, or negligent work
• Loss or damage to products

BP 00 03–Businessowners Coverage Form

Exclusions are the same as in CP 10 30 except:

• Fungi, Wet Rot, or Dry Rot has a slightly different title and does not refer to bacteria.
• Virus or Bacteria picks up Bacteria. However, CP 10 30 does not mention Virus.

· The Electrical Apparatus exclusion extends coverage to computers due to artificially generated electrical, magnetic, or electromagnetic energy under certain circumstances.

The following exclusions are added:

· Certain Computer-Related Losses (similar to the Year 2000 (Y2K) Exclusion)

· Errors Or Omissions, with respect to electronic data, computer operations, and valuable papers or records

· Installation, Testing, Repair, with respect to computers systems and electronic data

· Electrical Disturbance, with respect to electronic data

· Accounts Receivable exclusions are added because the coverage form provides accounts receivable coverage

Causes of Loss Limitations

CP 10 30–Causes of Loss–Special Form

• Loss or damage to steam boilers, steam pipes, steam engines, or steam turbines damaged by conditions within them is excluded, except when gases or fuel that explode inside the furnace or within a flue or other passage cause the damage.
• Loss or damage to water heating devices damaged by conditions within them is excluded except when they are caused by or result from an explosion.
• Loss or damage to the interior of any building and personal property for loss or damage caused by or that results from rain, snow, sleet, ice, sand, or dust is excluded unless they enter through an opening in the building created by a covered cause of loss.
• *Theft of building materials awaiting installation in a building is excluded.
• Inventory shortage or any missing property loss that only an inventory can prove is excluded.
• Loss or damage to property transferred based on unauthorized instructions is excluded.
• Loss or damage to animals is excluded unless caused by a specified cause of loss or glass breakage and death results from the damage.
• Breakage of fragile objects is covered for only loss or damage caused by a specified cause of loss or glass breakage.
• *Builders’ machinery, tools, and equipment off premises are covered for only loss or damage caused by a specified cause of loss or glass breakage.

• Furs, fur garments, and garments trimmed with fur are covered for up to $2,500 for loss or damage due to theft.
• Jewelry, watches, watch movements, jewels, pearls, gold, and similar items are covered for up to $2,500 for loss or damage due to theft. This limitation does not apply to jewelry and watches valued at less than $100 each.

• Patterns, dies, molds, and forms are covered for up to $2,500 for loss or damage due to theft.
• *Stamps, tickets, letters of credit, and lottery tickets held for sale are covered for up to $250 for loss or damage due to theft.
• Costs to repair defects in systems or appliances that any material escapes from are excluded. However, the cost to repair fire-extinguishing systems or damage due to discharge or freezing is covered.

BP 00 03–Businessowners Coverage Form

Causes of Loss Limitations are the same as in CP 10 30 except for the items above with an asterisk (*). They are not subject to any limitation.

Note: Stamps, tickets, letters of credit, and lottery tickets held for sale meet the definition of securities in the Businessowners Coverage Form. As a result, they are excluded as covered property and there is no limitation because there is no coverage.

Causes of Loss–Additional Coverages

CP 10 30–Causes of Loss–Special Form

• Additional Coverage–Collapse
• Additional Coverage–Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria

BP 00 03–Businessowners Coverage Form

BP 00 03 covers these as Additional Coverages.

Causes of Loss–Additional Coverage Extensions

CP 10 30–Causes of Loss–Special Form

• Property in Transit
• Water Damage, Other Liquids, Powder, or Molten Material Damage
• Glass Expenses

BP 00 03–Businessowners Coverage Form

Property in Transit is part of 6. Coverage Extensions b. Personal Property off Premises. e. Water Damage, Other Liquids, Powder or Molten Material Damage and n. Glass Expenses are part of 5. Additional Coverages.

COMMERCIAL GENERAL LIABILITY COVERAGE

Insuring Agreement

CG 00 01–Commercial General Liability Coverage Form

Coverage A–Bodily Injury and Property Damage Liability and Coverage B–Personal and Advertising Injury Liability are separate insuring agreements.

BP 00 03–Businessowners Coverage Form

The Business Liability Insuring Agreement incorporates everything in the Insuring Agreements for Coverage A and Coverage B in CG 00 01.

Medical Expenses

CG 00 01–Commercial General Liability Coverage Form

This covers medical expenses for third parties under certain circumstances, regardless of fault.

BP 00 03–Businessowners Coverage Form

This coverage is the same as in CG 00 01.

Supplementary Payments

CG 00 01–Commercial General Liability Coverage Form

Supplementary payments are separate and outside the limit of insurance and apply to bodily injury, property damage, and personal and advertising injury liability coverages. They include defense costs, costs of bail bonds, interest, and other items. They also include similar expenses incurred for other indemnitees subject to certain conditions.

BP 00 03–Businessowners Coverage Form

These payments are the same as in CG 00 01.

Exclusions

CG 00 01–Commercial General Liability Coverage Form

CG 00 01 separately lists the exclusions for Coverage A, Coverage B, and Coverage C.

Coverage A–Bodily Injury and Property Damage

• Expected or Intended Injury
• Contractual Liability
• Liquor Liability
• Workers' Compensation and Similar Laws
• Employers' Liability
• Pollution
• Aircraft, Auto, or Watercraft
• Mobile Equipment
• War
• Damage to Property
• Damage to Your Product
• Damage to Your Work
• Damage to Impaired Property or Property Not Physically Injured
• Recall of Products, Work, or Impaired Property
• Personal and Advertising Injury
• Electronic Data
• Recording and Distribution of Material in Violation of Statutes

Coverage B–Personal and Advertising Injury

• Knowing Violation of Rights of Another
• Material Published with Knowledge of Falsity
• Material Published Prior to Policy Period
• Criminal Acts
• Contractual Liability
• Breach of Contract
• Quality or Performance of Goods–Failure to Conform to Statements
• Wrong Description of Prices
• Infringement of Copyright, Patent, Trademark, or Trade Secret
• Insureds in Media and Internet-Type Businesses
• Electronic Chat Rooms or Bulletin Boards
• Unauthorized Use of Another's Name or Product
• Pollution
• Pollution-Related
• War
• Recording and Distribution of Material in Violation of Statutes

Coverage C–Medical Payments

• Any Insured
• Hired Persons
• Injury on Normally Occupied Premises
• Workers' Compensation and Similar Laws
• Athletic Activities
• Products-Completed Operations Hazard
• Coverage A Exclusions

IL 00 21–Nuclear Energy Liability Exclusion Endorsement (Broad Form)

This applies to all liability coverages.

BP 00 03–Businessowners Coverage Form

This coverage form has the same exclusions that CG 00 01 has. However:

• All exclusions are in one section instead of in separate sections. Each exclusion specifically identifies the coverage or coverages it applies to.
• BP 00 03 excludes loss or damage due to aircraft, autos, or watercraft, except non-owned watercraft up to 51 feet long. CG 00 01 limits non-owned watercraft to 26 feet long.
• BP 00 03 excludes nine specific professions under professional services. CG 00 01 does not exclude professional services but exclusions must be added when the intent is to do so.

Who is an Insured

CG 00 01–Commercial General Liability Coverage Form

The insured is based on the type of legal entity. Insured includes employees, volunteer workers, real estate managers, those with temporary custody of property, and properly appointed legal representatives. Newly acquired or formed organizations are automatically included, subject to certain conditions and limitations.

BP 00 03–Businessowners Coverage Form

Insured is the same as in CG 00 01, except that BP 00 03 does not cover newly acquired or formed organizations.

Limits of Insurance

CG 00 01–Commercial General Liability Coverage Form

• The most paid in any one occurrence are the Limits of Insurance on the declarations, regardless of the number of insureds, claimants, or suits.
• The General Aggregate Limit is the most paid for the total of damages due to bodily injury, property damage, medical expenses, and personal and advertising injury. It does not apply to bodily injury or property damage from the products-completed operations hazard because it has its own separate aggregate limit.
• The Products-Completed Operations Aggregate Limit is the most paid because of bodily injury or property damage that arises out of the products-completed operations hazard.
• The Personal and Advertising Injury Limit applies to each person or to each organization but is subject to the General Aggregate Limit.
• The Each Occurrence Limit is the most paid for damages due to bodily injury, property damage, and medical expenses in any one occurrence, subject to the General Aggregate Limit or the Products-Completed Operations Aggregate Limit.
• The Damage to Premises Rented to You Limit is the most paid for damages due to property damage to anyone premises rented to the insured, subject to the Each Occurrence Limit and the General Aggregate Limit.
• The Medical Expense Limit is the most paid for medical expenses for any one person due to bodily injury. It is subject to the Per Occurrence Limit and the General Aggregate Limit.

BP 00 03–Businessowners Coverage Form

BP 00 03’s limits are the same as in CG 00 01 except:

• The General Aggregate Limit is two times the Liability and Medical Expense Limit.
• The Products-Completed Operations Aggregate Limit is two times the Liability and Medical Expense Limit.
• The Liability and Medical Expense Limits apply to bodily injury, property damage, and personal and advertising injury. There is no separate limit for Personal and Advertising Injury.

Conditions

CG 00 01–Commercial General Liability Coverage Form and IL 00 17–Common Policy Conditions

• Bankruptcy
• Duties in the Event of an Occurrence, Offense, Claim, or Suit
• Legal Action Against Us
• Other Insurance
• Premium Audit
• *Representations
• Separation of Insureds
• Transfer of Rights of Recovery Against Others to Us
• *When We Do Not Renew

· Cancellation

· Changes

· Examination of Your Books and Records

· Inspections and Surveys

· Premiums

· Transfer of Your Rights and Duties Under This Policy

BP 00 03–Businessowners Coverage Form

These are the same as in CG 00 01 except for the items above with an asterisk (*). BP 00 03 also has the following:

• Concealment, Misrepresentation, or Fraud
• Insurance Under Two or More Coverages
• Liberalization

Other differences:

· Cancellation allows for five days’ notice to the insured:

o If the building is vacant

o If the building is not repaired after a loss

o If the building is ordered to be vacated

o If permanent or fixed property is removed

o If services are discontinued

o If taxes are not paid

· The other insurance clause is much more restrictive with less explanation.

· The premium section allows for additional charges if business operations change during the year. It also gives the insured the right to continue the policy at renewal subject to any new forms and new rates that apply.