COMMERCIAL PROPERTY CP DS 00 10 00 · PDF fileCOMMERCIAL PROPERTY CP 10 30 04 02 CP 10 30 04...

COMMERCIAL PROPERTYCP DS 00 10 00

CP DS 00 10 00 Copyright, Insurance Services Office, Inc., 1999 of 1 ��

COMMERCIAL PROPERTY COVERAGE PARTDECLARATIONS PAGE

POLICY NO. EFFECTIVE DATE / / �� "X" If SupplementalDeclarations Is Attached

NAMED INSURED

DESCRIPTION OF PREMISESPrem.No.

Bldg.No.

Location, Construction And Occupancy

COVERAGES PROVIDED Insurance At The Described Premises Applies Only For Coverages For WhichA Limit Of Insurance Is Shown

Prem.No.

Bldg.No. Coverage

LimitOf Insurance

CoveredCauses Of Loss Coinsurance* Rates

*If Extra Expense Coverage, Limits On Loss PaymentOPTIONAL COVERAGES Applicable Only When Entries Are Made In The Schedule BelowPrem. Bldg. Agreed Value Replacement Cost (X)No. No. Expiration Date Cov. Amount Building Pers.

Prop.Including"Stock"

Inflation Guard (%) *Monthly Limit Of Maximum Period *Extended PeriodBldg. Pers. Prop. Indemnity (Fraction) Of Indemnity (X) Of Indemnity (Days)

*Applies to Business Income OnlyMORTGAGEHOLDERSPrem.No.

Bldg.No.

Mortgageholder Name And Mailing Address

DEDUCTIBLE$500. Exceptions:

FORMS APPLICABLETo All Coverages:To Specific Premises/Coverages:Prem.No.

Bldg.No.

Coverages Form Number

COMMERCIAL PROPERTYCP 10 30 04 02

CP 10 30 04 02 © ISO Properties, Inc., 2001 Page 1 of 9 ��

CAUSES OF LOSS � SPECIAL FORMWords and phrases that appear in quotation marks have special meaning. Refer to Section F. � Definitions.

A. Covered Causes Of LossWhen Special is shown in the Declarations, Cov-ered Causes of Loss means Risks Of DirectPhysical Loss unless the loss is:1. Excluded in Section B., Exclusions; or2. Limited in Section C., Limitations;that follow.

B. Exclusions1. We will not pay for loss or damage caused

directly or indirectly by any of the following.Such loss or damage is excluded regardless ofany other cause or event that contributes con-currently or in any sequence to the loss.a. Ordinance Or Law

The enforcement of any ordinance or law:(1) Regulating the construction, use or

repair of any property; or(2) Requiring the tearing down of any prop-

erty, including the cost of removing itsdebris.

This exclusion, Ordinance Or Law, applieswhether the loss results from:

(1) An ordinance or law that is enforcedeven if the property has not been dam-aged; or

(2) The increased costs incurred to complywith an ordinance or law in the course ofconstruction, repair, renovation, remod-eling or demolition of property, or re-moval of its debris, following a physicalloss to that property.

b. Earth Movement(1) Earthquake, including any earth sinking,

rising or shifting related to such event;(2) Landslide, including any earth sinking,

rising or shifting related to such event;(3) Mine subsidence, meaning subsidence

of a man-made mine, whether or notmining activity has ceased;

(4) Earth sinking (other than sinkhole col-lapse), rising or shifting including soilconditions which cause settling, crackingor other disarrangement of foundationsor other parts of realty. Soil conditionsinclude contraction, expansion, freezing,thawing, erosion, improperly compactedsoil and the action of water under theground surface.

But if Earth Movement, as described inb.(1) through (4) above, results in fire orexplosion, we will pay for the loss or dam-age caused by that fire or explosion.

(5) Volcanic eruption, explosion or effusion.But if volcanic eruption, explosion or ef-fusion results in fire, building glassbreakage or Volcanic Action, we will payfor the loss or damage caused by thatfire, building glass breakage or VolcanicAction.Volcanic action means direct loss ordamage resulting from the eruption of avolcano when the loss or damage iscaused by:

(a) Airborne volcanic blast or airborneshock waves;

(b) Ash, dust or particulate matter; or(c) Lava flow.All volcanic eruptions that occur withinany 168 hour period will constitute a sin-gle occurrence.Volcanic action does not include the costto remove ash, dust or particulate matterthat does not cause direct physical lossor damage to the described property.

c. Governmental ActionSeizure or destruction of property by orderof governmental authority.But we will pay for loss or damage causedby or resulting from acts of destruction or-dered by governmental authority and takenat the time of a fire to prevent its spread, ifthe fire would be covered under this Cover-age Part.

of 9 © ISO Properties, Inc., 2001 CP 10 30 04 02 ��

d. Nuclear HazardNuclear reaction or radiation, or radioactivecontamination, however caused.But if nuclear reaction or radiation, or radio-active contamination, results in fire, we willpay for the loss or damage caused by thatfire.

e. Utility ServicesThe failure of power or other utility servicesupplied to the described premises, how-ever caused, if the failure occurs away fromthe described premises. Failure includeslack of sufficient capacity and reduction insupply.But if the failure of power or other utilityservice results in a Covered Cause of Loss,we will pay for the loss or damage causedby that Covered Cause of Loss.This exclusion does not apply to the Busi-ness Income coverage or to Extra Expensecoverage. Instead, the Special Exclusion inParagraph B.4.a.(1) applies to these cover-ages.

f. War And Military Action(1) War, including undeclared or civil war;(2) Warlike action by a military force, in-

cluding action in hindering or defendingagainst an actual or expected attack, byany government, sovereign or otherauthority using military personnel orother agents; or

(3) Insurrection, rebellion, revolution,usurped power, or action taken by gov-ernmental authority in hindering or de-fending against any of these.

g. Water(1) Flood, surface water, waves, tides, tidal

waves, overflow of any body of water, ortheir spray, all whether driven by wind ornot;

(2) Mudslide or mudflow;(3) Water that backs up or overflows from a

sewer, drain or sump; or(4) Water under the ground surface press-

ing on, or flowing or seeping through:(a) Foundations, walls, floors or paved

surfaces;(b) Basements, whether paved or not; or(c) Doors, windows or other openings.

But if Water, as described in g.(1) throughg.(4) above, results in fire, explosion orsprinkler leakage, we will pay for the loss ordamage caused by that fire, explosion orsprinkler leakage.

h. "Fungus", Wet Rot, Dry Rot And BacteriaPresence, growth, proliferation, spread orany activity of "fungus", wet or dry rot orbacteria.But if "fungus", wet or dry rot or bacteria re-sults in a "specified cause of loss", we willpay for the loss or damage caused by that"specified cause of loss".This exclusion does not apply:1. When "fungus", wet or dry rot or bacteria

results from fire or lightning; or2. To the extent that coverage is provided

in the Additional Coverage � LimitedCoverage For "Fungus", Wet Rot, DryRot And Bacteria with respect to loss ordamage by a cause of loss other thanfire or lightning.

Exclusions B.1.a. through B.1.h. apply whetheror not the loss event results in widespreaddamage or affects a substantial area.

2. We will not pay for loss or damage caused byor resulting from any of the following:a. Artificially generated electrical current, in-

cluding electric arcing, that disturbs electri-cal devices, appliances or wires.But if artificially generated electrical currentresults in fire, we will pay for the loss ordamage caused by that fire.

b. Delay, loss of use or loss of market.c. Smoke, vapor or gas from agricultural

smudging or industrial operations.d.(1) Wear and tear;

(2) Rust or other corrosion, decay, deterio-ration, hidden or latent defect or anyquality in property that causes it to dam-age or destroy itself;

(3) Smog;(4) Settling, cracking, shrinking or expan-

sion;(5) Nesting or infestation, or discharge or

release of waste products or secretions,by insects, birds, rodents or other ani-mals.


(6) Mechanical breakdown, including rup-ture or bursting caused by centrifugalforce. But if mechanical breakdown re-sults in elevator collision, we will pay forthe loss or damage caused by that ele-vator collision.

(7) The following causes of loss to personalproperty:

(a) Dampness or dryness of atmos-phere;

(b) Changes in or extremes of tempera-ture; or

(c) Marring or scratching.But if an excluded cause of loss that islisted in 2.d.(1) through (7) results in a"specified cause of loss" or building glassbreakage, we will pay for the loss or dam-age caused by that "specified cause of loss"or building glass breakage.

e. Explosion of steam boilers, steam pipes,steam engines or steam turbines owned orleased by you, or operated under your con-trol. But if explosion of steam boilers, steampipes, steam engines or steam turbines re-sults in fire or combustion explosion, we willpay for the loss or damage caused by thatfire or combustion explosion. We will alsopay for loss or damage caused by or re-sulting from the explosion of gases or fuelwithin the furnace of any fired vessel orwithin the flues or passages through whichthe gases of combustion pass.

f. Continuous or repeated seepage or leakageof water, or the presence or condensation ofhumidity, moisture or vapor, that occursover a period of 14 days or more.

g. Water, other liquids, powder or moltenmaterial that leaks or flows from plumbing,heating, air conditioning or other equipment(except fire protective systems) caused byor resulting from freezing, unless:

(1) You do your best to maintain heat in thebuilding or structure; or

(2) You drain the equipment and shut off thesupply if the heat is not maintained.

h. Dishonest or criminal act by you, any of yourpartners, members, officers, managers,employees (including leased employees),directors, trustees, authorized representa-tives or anyone to whom you entrust theproperty for any purpose:

(1) Acting alone or in collusion with others;or

(2) Whether or not occurring during thehours of employment.

This exclusion does not apply to acts of de-struction by your employees (includingleased employees); but theft by employees(including leased employees) is not cov-ered.

i. Voluntary parting with any property by youor anyone else to whom you have entrustedthe property if induced to do so by anyfraudulent scheme, trick, device or falsepretense.

j. Rain, snow, ice or sleet to personal propertyin the open.

k. Collapse, except as provided below in theAdditional Coverage for Collapse. But ifcollapse results in a Covered Cause of Lossat the described premises, we will pay forthe loss or damage caused by that CoveredCause of Loss.

l. Discharge, dispersal, seepage, migration,release or escape of "pollutants" unless thedischarge, dispersal, seepage, migration,release or escape is itself caused by any ofthe "specified causes of loss". But if the dis-charge, dispersal, seepage, migration, re-lease or escape of "pollutants" results in a"specified cause of loss", we will pay for theloss or damage caused by that "specifiedcause of loss".This exclusion, I., does not apply to damageto glass caused by chemicals applied to theglass.

m. Neglect of an insured to use all reasonablemeans to save and preserve property fromfurther damage at and after the time of loss.

3. We will not pay for loss or damage caused byor resulting from any of the following, 3.a.through 3.c. But if an excluded cause of lossthat is listed in 3.a. through 3.c. results in aCovered Cause of Loss, we will pay for the lossor damage caused by that Covered Cause ofLoss.a. Weather conditions. But this exclusion only

applies if weather conditions contribute inany way with a cause or event excluded inParagraph 1. above to produce the loss ordamage.

b. Acts or decisions, including the failure to actor decide, of any person, group, organiza-tion or governmental body.


c. Faulty, inadequate or defective:(1) Planning, zoning, development, survey-

ing, siting;(2) Design, specifications, workmanship,

repair, construction, renovation, remod-eling, grading, compaction;

(3) Materials used in repair, construction,renovation or remodeling; or

(4) Maintenance;of part or all of any property on or off thedescribed premises.

4. Special ExclusionsThe following provisions apply only to thespecified Coverage Forms.a. Business Income (And Extra Expense)

Coverage Form, Business Income(Without Extra Expense) Coverage Form,Or Extra Expense Coverage FormWe will not pay for:

(1) Any loss caused directly or indirectly bythe failure of power or other utility serv-ice supplied to the described premises,however caused, if the failure occursoutside of a covered building. Failure in-cludes lack of sufficient capacity and re-duction in supply.But if the failure of power or other utilityservice results in a Covered Cause ofLoss, we will pay for the loss resultingfrom that Covered Cause of Loss.

(2) Any loss caused by or resulting from:(a) Damage or destruction of "finished

stock"; or(b) The time required to reproduce "fin-

ished stock".This exclusion does not apply to ExtraExpense.

(3) Any loss caused by or resulting fromdirect physical loss or damage to radioor television antennas (including satellitedishes) and their lead-in wiring, masts ortowers.

(4) Any increase of loss caused by or re-sulting from:

(a) Delay in rebuilding, repairing or re-placing the property or resuming"operations", due to interference atthe location of the rebuilding, repairor replacement by strikers or otherpersons; or

(b) Suspension, lapse or cancellation ofany license, lease or contract. But ifthe suspension, lapse or cancellationis directly caused by the "suspen-sion" of "operations", we will coversuch loss that affects your BusinessIncome during the "period of restora-tion" and any extension of the "periodof restoration" in accordance with theterms of the Extended Business In-come Additional Coverage and theExtended Period Of Indemnity Op-tional Coverage or any variation ofthese.

(5) Any Extra Expense caused by or result-ing from suspension, lapse or cancella-tion of any license, lease or contract be-yond the "period of restoration".

(6) Any other consequential loss.b. Leasehold Interest Coverage Form

(1) Paragraph B.1.a. Ordinance Or Law,does not apply to insurance under thisCoverage Form.

(2) We will not pay for any loss caused by:(a) Your cancelling the lease;(b) The suspension, lapse or cancella-

tion of any license; or(c) Any other consequential loss.

c. Legal Liability Coverage Form(1) The following exclusions do not apply to

insurance under this Coverage Form:(a) Paragraph B.1.a., Ordinance Or Law;(b) Paragraph B.1.c., Governmental

Action;(c) Paragraph B.1.d., Nuclear Hazard;(d) Paragraph B.1.e., Utility Services;

and(e) Paragraph B.1.f., War And Military

Action.


(2) The following additional exclusions applyto insurance under this Coverage Form:

(a) Contractual LiabilityWe will not defend any claim or"suit", or pay damages that you arelegally liable to pay, solely by reasonof your assumption of liability in acontract or agreement. But this ex-clusion does not apply to a writtenlease agreement in which you haveassumed liability for building damageresulting from an actual or attemptedburglary or robbery, provided that:(i) Your assumption of liability was

executed prior to the accident;and

(ii) The building is Covered Propertyunder this Coverage Form.

(b) Nuclear HazardWe will not defend any claim or"suit", or pay any damages, loss,expense or obligation, resulting fromnuclear reaction or radiation, orradioactive contamination, howevercaused.

C. LimitationsThe following limitations apply to all policy formsand endorsements, unless otherwise stated.1. We will not pay for loss of or damage to prop-

erty, as described and limited in this section. Inaddition, we will not pay for any loss that is aconsequence of loss or damage as describedand limited in this section.a. Steam boilers, steam pipes, steam engines

or steam turbines caused by or resultingfrom any condition or event inside suchequipment. But we will pay for loss of ordamage to such equipment caused by orresulting from an explosion of gases or fuelwithin the furnace of any fired vessel orwithin the flues or passages through whichthe gases of combustion pass.

b. Hot water boilers or other water heatingequipment caused by or resulting from anycondition or event inside such boilers orequipment, other than an explosion.

c. The interior of any building or structure, orto personal property in the building orstructure, caused by or resulting from rain,snow, sleet, ice, sand or dust, whetherdriven by wind or not, unless:

(1) The building or structure first sustainsdamage by a Covered Cause of Loss toits roof or walls through which the rain,snow, sleet, ice, sand or dust enters; or

(2) The loss or damage is caused by orresults from thawing of snow, sleet or iceon the building or structure.

d. Building materials and supplies not attachedas part of the building or structure, causedby or resulting from theft.However, this limitation does not apply to:

(1) Building materials and supplies held forsale by you, unless they are insured un-der the Builders Risk Coverage Form; or

(2) Business Income coverage or ExtraExpense coverage.

e. Property that is missing, where the onlyevidence of the loss or damage is a short-age disclosed on taking inventory, or otherinstances where there is no physical evi-dence to show what happened to the prop-erty.

f. Property that has been transferred to aperson or to a place outside the describedpremises on the basis of unauthorized in-structions.

2. We will not pay for loss of or damage to thefollowing types of property unless caused bythe "specified causes of loss" or building glassbreakage:a. Animals, and then only if they are killed or

their destruction is made necessary.b. Fragile articles such as statuary, marbles,

chinaware and porcelains, if broken. Thisrestriction does not apply to:

(1) Glass; or(2) Containers of property held for sale.

c. Builders' machinery, tools and equipmentowned by you or entrusted to you, providedsuch property is Covered Property.


However, this limitation does not apply:(1) If the property is located on or within 100

feet of the described premises, unlessthe premises is insured under the Build-ers Risk Coverage Form; or

(2) To Business Income coverage or toExtra Expense coverage.

3. The special limit shown for each category, a.through d., is the total limit for loss of or dam-age to all property in that category. The speciallimit applies to any one occurrence of theft, re-gardless of the types or number of articles thatare lost or damaged in that occurrence. Thespecial limits are:a. $2,500 for furs, fur garments and garments

trimmed with fur.b. $2,500 for jewelry, watches, watch move-

ments, jewels, pearls, precious and semi-precious stones, bullion, gold, silver, plati-num and other precious alloys or metals.This limit does not apply to jewelry andwatches worth $100 or less per item.

c. $2,500 for patterns, dies, molds and forms.d. $250 for stamps, tickets, including lottery

tickets held for sale, and letters of credit.These special limits are part of, not in additionto, the Limit of Insurance applicable to theCovered Property.This limitation, C.3., does not apply to BusinessIncome coverage or to Extra Expense cover-age.

4. We will not pay the cost to repair any defect toa system or appliance from which water, otherliquid, powder or molten material escapes. Butwe will pay the cost to repair or replace dam-aged parts of fire extinguishing equipment if thedamage:a. Results in discharge of any substance from

an automatic fire protection system; orb. Is directly caused by freezing.However, this limitation does not apply to Busi-ness Income coverage or to Extra Expensecoverage.

D. Additional Coverage � CollapseThe term Covered Cause of Loss includes the Ad-ditional Coverage � Collapse as described andlimited in D.1. through D.5. below.1. With respect to buildings:

a. Collapse means an abrupt falling down orcaving in of a building or any part of abuilding with the result that the building orpart of the building cannot be occupied forits intended purpose;

b. A building or any part of a building that is indanger of falling down or caving in is notconsidered to be in a state of collapse;

c. A part of a building that is standing is notconsidered to be in a state of collapse evenif it has separated from another part of thebuilding;

d. A building that is standing or any part of abuilding that is standing is not considered tobe in a state of collapse even if it showsevidence of cracking, bulging, sagging,bending, leaning, settling, shrinkage or ex-pansion.

2. We will pay for direct physical loss or damageto Covered Property, caused by collapse of abuilding or any part of a building that is insuredunder this Coverage Form or that containsCovered Property insured under this CoverageForm, if the collapse is caused by one or moreof the following:a. The "specified causes of loss" or breakage

of building glass, all only as insured againstin this Coverage Part;

b. Decay that is hidden from view, unless thepresence of such decay is known to an in-sured prior to collapse;

c. Insect or vermin damage that is hidden fromview, unless the presence of such damageis known to an insured prior to collapse;

d. Weight of people or personal property;e. Weight of rain that collects on a roof;


f. Use of defective material or methods inconstruction, remodeling or renovation if thecollapse occurs during the course of theconstruction, remodeling or renovation.However, if the collapse occurs after con-struction, remodeling or renovation is com-plete and is caused in part by a cause ofloss listed in 2.a. through 2.e., we will payfor the loss or damage even if use of defec-tive material or methods, in construction,remodeling or renovation, contributes to thecollapse.

The criteria set forth in 1.a. through 1.d. do notlimit the coverage otherwise provided underthis Causes of Loss Form for the causes ofloss listed in 2.a., 2.d. and 2.e.

3. With respect to the following property:a. Outdoor radio or television antennas (in-

cluding satellite dishes) and their lead-inwiring, masts or towers;

b. Awnings, gutters and downspouts;c. Yard fixtures;d. Outdoor swimming pools;e. Fences;f. Piers, wharves and docks;g. Beach or diving platforms or appurte-

nances;h. Retaining walls; andi. Walks, roadways and other paved surfaces;

if the collapse is caused by a cause of losslisted in 2.b. through 2.f., we will pay for loss ordamage to that property only if:a. Such loss or damage is a direct result of the

collapse of a building insured under thisCoverage Form; and

b. The property is Covered Property under thisCoverage Form.

4. If personal property abruptly falls down orcaves in and such collapse is not the result ofcollapse of a building, we will pay for loss ordamage to Covered Property caused by suchcollapse of personal property only if:a. The collapse was caused by a Cause of

Loss listed in 2.a. through 2.f. above;b. The personal property which collapses is

inside a building; andc. The property which collapses is not of a

kind listed in 3. above, regardless ofwhether that kind of property is consideredto be personal property or real property.

The coverage stated in this Paragraph 4. doesnot apply to personal property if marring and/orscratching is the only damage to that personalproperty caused by the collapse.Collapse of personal property does not meancracking, bulging, sagging, bending, leaning,settling, shrinkage or expansion.

5. This Additional Coverage, Collapse, will notincrease the Limits of Insurance provided inthis Coverage Part.

E. Additional Coverage � Limited Coverage For"Fungus", Wet Rot, Dry Rot And Bacteria1. The coverage described in E.2. and E.6. only

applies when the "fungus", wet or dry rot orbacteria is the result of one or more of the fol-lowing causes that occurs during the policy pe-riod and only if all reasonable means wereused to save and preserve the property fromfurther damage at the time of and after that oc-currence.a. A "specified cause of loss" other than fire or

lightning; orb. Flood, if the Flood Coverage Endorsement

applies to the affected premises.2. We will pay for loss or damage by "fungus", wet

or dry rot or bacteria. As used in this LimitedCoverage, the term loss or damage means:a. Direct physical loss or damage to Covered

Property caused by "fungus", wet or dry rotor bacteria, including the cost of removal ofthe "fungus", wet or dry rot or bacteria;

b. The cost to tear out and replace any part ofthe building or other property as needed togain access to the "fungus", wet or dry rot orbacteria; and

c. The cost of testing performed after removal,repair, replacement or restoration of thedamaged property is completed, providedthere is a reason to believe that "fungus",wet or dry rot or bacteria are present.

3. The coverage described under E.2. of thisLimited Coverage is limited to $15,000. Re-gardless of the number of claims, this limit isthe most we will pay for the total of all loss ordamage arising out of all occurrences of"specified causes of loss" (other than fire orlightning) and Flood which take place in a 12-month period (starting with the beginning of thepresent annual policy period). With respect to aparticular occurrence of loss which results in"fungus", wet or dry rot or bacteria, we will notpay more than a total of $15,000 even if the"fungus", wet or dry rot or bacteria continues tobe present or active, or recurs, in a later policyperiod.


4. The coverage provided under this Limited Cov-erage does not increase the applicable Limit ofInsurance on any Covered Property. If a par-ticular occurrence results in loss or damage by"fungus", wet or dry rot or bacteria, and otherloss or damage, we will not pay more, for thetotal of all loss or damage, than the applicableLimit of Insurance on the affected CoveredProperty.If there is covered loss or damage to CoveredProperty, not caused by "fungus", wet or dry rotor bacteria, loss payment will not be limited bythe terms of this Limited Coverage, except tothe extent that "fungus", wet or dry rot or bacte-ria causes an increase in the loss. Any such in-crease in the loss will be subject to the terms ofthis Limited Coverage.

5. The terms of this Limited Coverage do notincrease or reduce the coverage provided un-der Paragraph F.2. (Water Damage, Other Liq-uids, Powder Or Molten Material Damage) ofthis Causes Of Loss Form or under the Addi-tional Coverage � Collapse.

6. The following, 6.a. or 6.b., applies only if Busi-ness Income and/or Extra Expense coverageapplies to the described premises and only ifthe "suspension" of "operations" satisfies allterms and conditions of the applicable Busi-ness Income and/or Extra Expense coverageform.a. If the loss which resulted in "fungus", wet or

dry rot or bacteria does not in itself neces-sitate a "suspension" of "operations", butsuch "suspension" is necessary due to lossor damage to property caused by "fungus",wet or dry rot or bacteria, then our paymentunder Business Income and/or Extra Ex-pense is limited to the amount of loss and/orexpense sustained in a period of not morethan 30 days. The days need not be con-secutive.

b. If a covered "suspension" of "operations"was caused by loss or damage other than"fungus", wet or dry rot or bacteria but re-mediation of "fungus", wet or dry rot orbacteria prolongs the "period of restoration",we will pay for loss and/or expense sus-tained during the delay (regardless of whensuch a delay occurs during the "period ofrestoration"), but such coverage is limited to30 days. The days need not be consecutive.

F. Additional Coverage Extensions1. Property In Transit

This Extension applies only to your personalproperty to which this form applies.a. You may extend the insurance provided by

this Coverage Part to apply to your personalproperty (other than property in the care,custody or control of your salespersons) intransit more than 100 feet from the de-scribed premises. Property must be in or ona motor vehicle you own, lease or operatewhile between points in the coverage terri-tory.

b. Loss or damage must be caused by orresult from one of the following causes ofloss:

(1) Fire, lightning, explosion, windstorm orhail, riot or civil commotion, or vandal-ism.

(2) Vehicle collision, upset or overturn.Collision means accidental contact ofyour vehicle with another vehicle or ob-ject. It does not mean your vehicle'scontact with the road bed.

(3) Theft of an entire bale, case or packageby forced entry into a securely lockedbody or compartment of the vehicle.There must be visible marks of theforced entry.

c. The most we will pay for loss or damageunder this Extension is $5,000.

This Coverage Extension is additional insur-ance. The Additional Condition, Coinsurance,does not apply to this Extension.

2. Water Damage, Other Liquids, Powder OrMolten Material DamageIf loss or damage caused by or resulting fromcovered water or other liquid, powder or moltenmaterial damage loss occurs, we will also paythe cost to tear out and replace any part of thebuilding or structure to repair damage to thesystem or appliance from which the water orother substance escapes. This Coverage Ex-tension does not increase the Limit of Insur-ance.

3. Glassa. We will pay for expenses incurred to put up

temporary plates or board up openings ifrepair or replacement of damaged glass isdelayed.


b. We will pay for expenses incurred to re-move or replace obstructions when repair-ing or replacing glass that is part of a build-ing. This does not include removing or re-placing window displays.

This Coverage Extension, F.3., does not in-crease the Limit of Insurance.

G. Definitions1. "Fungus" means any type or form of fungus,

including mold or mildew, and any mycotoxins,spores, scents or by-products produced or re-leased by fungi.

2. "Specified Causes of Loss" means the follow-ing: Fire; lightning; explosion; windstorm or hail;smoke; aircraft or vehicles; riot or civil commo-tion; vandalism; leakage from fire extinguishingequipment; sinkhole collapse; volcanic action;falling objects; weight of snow, ice or sleet;water damage.a. Sinkhole collapse means the sudden sink-

ing or collapse of land into undergroundempty spaces created by the action of wateron limestone or dolomite. This cause of lossdoes not include:

(1) The cost of filling sinkholes; or

(2) Sinking or collapse of land into man-made underground cavities.

b. Falling objects does not include loss ordamage to:

(1) Personal property in the open; or(2) The interior of a building or structure, or

property inside a building or structure,unless the roof or an outside wall of thebuilding or structure is first damaged bya falling object.

c. Water damage means accidental dischargeor leakage of water or steam as the directresult of the breaking apart or cracking of aplumbing, heating, air conditioning or othersystem or appliance (other than a sumpsystem including its related equipment andparts), that is located on the describedpremises and contains water or steam.



BUILDING AND PERSONALPROPERTY COVERAGE FORM

Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties andwhat is and is not covered.Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. Thewords "we", "us" and "our" refer to the Company providing this insurance.Other words and phrases that appear in quotation marks have special meaning. Refer to Section H. � Definitions.

A. CoverageWe will pay for direct physical loss of or damage toCovered Property at the premises described in theDeclarations caused by or resulting from any Cov-ered Cause of Loss.1. Covered Property

Covered Property, as used in this CoveragePart, means the type of property described inthis Section, A.1., and limited in A.2., PropertyNot Covered, if a Limit of Insurance is shown inthe Declarations for that type of property.a. Building, meaning the building or structure

described in the Declarations, including:(1) Completed additions;(2) Fixtures, including outdoor fixtures;(3) Permanently installed:

(a) Machinery and(b) Equipment;

(4) Personal property owned by you that isused to maintain or service the buildingor structure or its premises, including:

(a) Fire extinguishing equipment;(b) Outdoor furniture;(c) Floor coverings; and(d) Appliances used for refrigerating,

ventilating, cooking, dishwashing orlaundering;

(5) If not covered by other insurance:(a) Additions under construction, altera-

tions and repairs to the building orstructure;

(b) Materials, equipment, supplies andtemporary structures, on or within100 feet of the described premises,used for making additions, altera-tions or repairs to the building orstructure.

b. Your Business Personal Property locatedin or on the building described in the Decla-rations or in the open (or in a vehicle) within100 feet of the described premises, con-sisting of the following unless otherwisespecified in the Declarations or on the YourBusiness Personal Property � Separation ofCoverage form:

(1) Furniture and fixtures;(2) Machinery and equipment;(3) "Stock";(4) All other personal property owned by you

and used in your business;(5) Labor, materials or services furnished or

arranged by you on personal property ofothers;

(6) Your use interest as tenant in improve-ments and betterments. Improvementsand betterments are fixtures, alterations,installations or additions:

(a) Made a part of the building or struc-ture you occupy but do not own; and

(b) You acquired or made at your ex-pense but cannot legally remove;

(7) Leased personal property for which youhave a contractual responsibility to in-sure, unless otherwise provided for un-der Personal Property of Others.


c. Personal Property Of Others that is:(1) In your care, custody or control; and(2) Located in or on the building described

in the Declarations or in the open (or in avehicle) within 100 feet of the describedpremises.

However, our payment for loss of or dam-age to personal property of others will onlybe for the account of the owner of the prop-erty.

2. Property Not CoveredCovered Property does not include:a. Accounts, bills, currency, food stamps or

other evidences of debt, money, notes orsecurities. Lottery tickets held for sale arenot securities;

b. Animals, unless owned by others andboarded by you, or if owned by you, only as"stock" while inside of buildings;

c. Automobiles held for sale;d. Bridges, roadways, walks, patios or other

paved surfaces;e. Contraband, or property in the course of

illegal transportation or trade;f. The cost of excavations, grading, backfilling

or filling;g. Foundations of buildings, structures, ma-

chinery or boilers if their foundations arebelow:

(1) The lowest basement floor; or(2) The surface of the ground, if there is no

basement;h. Land (including land on which the property

is located), water, growing crops or lawns;i. Personal property while airborne or water-

borne;j. Bulkheads, pilings, piers, wharves or docks;k. Property that is covered under another

coverage form of this or any other policy inwhich it is more specifically described, ex-cept for the excess of the amount due(whether you can collect on it or not) fromthat other insurance;

l. Retaining walls that are not part of a build-ing;

m. Underground pipes, flues or drains;

n. Electronic data, except as provided underAdditional Coverages � Electronic Data.Electronic data means information, facts orcomputer programs stored as or on, createdor used on, or transmitted to or from com-puter software (including systems and ap-plications software), on hard or floppy disks,CD-ROMs, tapes, drives, cells, data proc-essing devices or any other repositories ofcomputer software which are used withelectronically controlled equipment. Theterm computer programs, referred to in theforegoing description of electronic data,means a set of related electronic instruc-tions which direct the operations and func-tions of a computer or device connected toit, which enable the computer or device toreceive, process, store, retrieve or senddata. This Paragraph n., does not apply toyour "stock" of prepackaged software.

o. The cost to replace or restore the informa-tion on valuable papers and records, in-cluding those which exist as electronic data.Valuable papers and records include butare not limited to proprietary information,books of account, deeds, manuscripts, ab-stracts, drawings and card index systems.Refer to the Coverage Extension for Valu-able Papers And Records (Other ThanElectronic Data) for limited coverage forvaluable papers and records other thanthose which exist as electronic data.

p. Vehicles or self-propelled machines (in-cluding aircraft or watercraft) that:

(1) Are licensed for use on public roads; or(2) Are operated principally away from the

described premises.This paragraph does not apply to:

(a) Vehicles or self-propelled machines orautos you manufacture, process orwarehouse;

(b) Vehicles or self-propelled machines,other than autos, you hold for sale;

(c) Rowboats or canoes out of water at thedescribed premises; or

(d) Trailers, but only to the extent providedfor in the Coverage Extension for Non-Owned Detached Trailers.


q. The following property while outside ofbuildings:

(1) Grain, hay, straw or other crops;(2) Fences, radio or television antennas

(including satellite dishes) and their lead-in wiring, masts or towers, signs (otherthan signs attached to buildings), trees,shrubs or plants (other than "stock" oftrees, shrubs or plants), all except asprovided in the Coverage Extensions.

3. Covered Causes Of LossSee applicable Causes of Loss Form as shownin the Declarations.

4. Additional Coveragesa. Debris Removal

(1) Subject to Paragraphs (3) and (4), wewill pay your expense to remove debrisof Covered Property caused by or re-sulting from a Covered Cause of Lossthat occurs during the policy period. Theexpenses will be paid only if they are re-ported to us in writing within 180 days ofthe date of direct physical loss or dam-age.

(2) Debris Removal does not apply to coststo:

(a) Extract "pollutants" from land orwater; or

(b) Remove, restore or replace pollutedland or water.

(3) Subject to the exceptions in Paragraph(4), the following provisions apply:

(a) The most we will pay for the total ofdirect physical loss or damage plusdebris removal expense is the Limitof Insurance applicable to the Cov-ered Property that has sustained lossor damage.

(b) Subject to (a) above, the amount wewill pay for debris removal expenseis limited to 25% of the sum of thedeductible plus the amount that wepay for direct physical loss or dam-age to the Covered Property that hassustained loss or damage.

(4) We will pay up to an additional $10,000for debris removal expense, for each lo-cation, in any one occurrence of physicalloss or damage to Covered Property, ifone or both of the following circum-stances apply:

(a) The total of the actual debris removalexpense plus the amount we pay fordirect physical loss or damage ex-ceeds the Limit of Insurance on theCovered Property that has sustainedloss or damage.

(b) The actual debris removal expenseexceeds 25% of the sum of the de-ductible plus the amount that we payfor direct physical loss or damage tothe Covered Property that has sus-tained loss or damage.

Therefore, if (4)(a) and/or (4)(b) apply,our total payment for direct physical lossor damage and debris removal expensemay reach but will never exceed theLimit of Insurance on the Covered Prop-erty that has sustained loss or damage,plus $10,000.

(5) ExamplesThe following examples assume thatthere is no coinsurance penalty.

Example #1

Limit of Insurance $ 90,000 Amount of Deductible $ 500 Amount of Loss $ 50,000 Amount of Loss Payable $ 49,500

($50,000 - $500) Debris Removal Expense $ 10,000 Debris Removal ExpensePayable $ 10,000 ($10,000 is 20% of $50,000)

The debris removal expense is less than25% of the sum of the loss payable plusthe deductible. The sum of the loss pay-able and the debris removal expense($49,500 + $10,000 = $59,500) is lessthan the Limit of Insurance. Thereforethe full amount of debris removal ex-pense is payable in accordance with theterms of Paragraph (3).


Example #2

Limit of Insurance $ 90,000 Amount of Deductible $ 500 Amount of Loss $ 80,000 Amount of Loss Payable $ 79,500

($80,000 - $500) Debris Removal Expense $ 30,000 Debris Removal ExpensePayable

Basic Amount $ 10,500 Additional Amount $ 10,000

The basic amount payable for debrisremoval expense under the terms ofParagraph (3) is calculated as follows:$80,000 ($79,500 + $500) x .25 =$20,000; capped at $10,500. The capapplies because the sum of the losspayable ($79,500) and the basic amountpayable for debris removal expense($10,500) cannot exceed the Limit of In-surance ($90,000).The additional amount payable for debrisremoval expense is provided in accor-dance with the terms of Paragraph (4),because the debris removal expense($30,000) exceeds 25% of the loss pay-able plus the deductible ($30,000 is37.5% of $80,000), and because thesum of the loss payable and debris re-moval expense ($79,500 + $30,000 =$109,500) would exceed the Limit of In-surance ($90,000). The additionalamount of covered debris removal ex-pense is $10,000, the maximum payableunder Paragraph (4). Thus the total pay-able for debris removal expense in thisexample is $20,500; $9,500 of the debrisremoval expense is not covered.

b. Preservation Of PropertyIf it is necessary to move Covered Propertyfrom the described premises to preserve itfrom loss or damage by a Covered Causeof Loss, we will pay for any direct physicalloss or damage to that property:

(1) While it is being moved or while tempo-rarily stored at another location; and

(2) Only if the loss or damage occurs within30 days after the property is first moved.

c. Fire Department Service ChargeWhen the fire department is called to saveor protect Covered Property from a CoveredCause of Loss, we will pay up to $1,000 foryour liability for fire department servicecharges:

(1) Assumed by contract or agreement priorto loss; or

(2) Required by local ordinance.No Deductible applies to this AdditionalCoverage.

d. Pollutant Clean Up And RemovalWe will pay your expense to extract "pollut-ants" from land or water at the describedpremises if the discharge, dispersal, seep-age, migration, release or escape of the"pollutants" is caused by or results from aCovered Cause of Loss that occurs duringthe policy period. The expenses will be paidonly if they are reported to us in writingwithin 180 days of the date on which theCovered Cause of Loss occurs.This Additional Coverage does not apply tocosts to test for, monitor or assess the ex-istence, concentration or effects of "pollut-ants". But we will pay for testing which isperformed in the course of extracting the"pollutants" from the land or water.The most we will pay under this AdditionalCoverage for each described premises is$10,000 for the sum of all covered ex-penses arising out of Covered Causes ofLoss occurring during each separate 12month period of this policy.

e. Increased Cost Of Construction(1) This Additional Coverage applies only to

buildings to which the Replacement CostOptional Coverage applies.

(2) In the event of damage by a CoveredCause of Loss to a building that is Cov-ered Property, we will pay the increasedcosts incurred to comply with enforce-ment of an ordinance or law in thecourse of repair, rebuilding or replace-ment of damaged parts of that property,subject to the limitations stated in e.(3)through e.(9) of this Additional Cover-age.


(3) The ordinance or law referred to in e.(2)of this Additional Coverage is an ordi-nance or law that regulates the con-struction or repair of buildings or estab-lishes zoning or land use requirementsat the described premises, and is inforce at the time of loss.

(4) Under this Additional Coverage, we willnot pay any costs due to an ordinance orlaw that:

(a) You were required to comply withbefore the loss, even when thebuilding was undamaged; and

(b) You failed to comply with.(5) Under this Additional Coverage, we will

not pay for:(a) The enforcement of any ordinance or

law which requires demolition, repair,replacement, reconstruction, remod-eling or remediation of property dueto contamination by "pollutants" ordue to the presence, growth, prolif-eration, spread or any activity of"fungus", wet or dry rot or bacteria; or

(b) Any costs associated with the en-forcement of an ordinance or lawwhich requires any insured or othersto test for, monitor, clean up, re-move, contain, treat, detoxify or neu-tralize, or in any way respond to, orassess the effects of "pollutants","fungus", wet or dry rot or bacteria.

(6) The most we will pay under this Addi-tional Coverage, for each describedbuilding insured under this CoverageForm, is $10,000 or 5% of the Limit ofInsurance applicable to that building,whichever is less. If a damaged buildingis covered under a blanket Limit of In-surance which applies to more than onebuilding or item of property, then themost we will pay under this AdditionalCoverage, for that damaged building, isthe lesser of: $10,000 or 5% times thevalue of the damaged building as of thetime of loss times the applicable coin-surance percentage.The amount payable under this Addi-tional Coverage is additional insurance.

(7) With respect to this Additional Coverage:(a) We will not pay for the Increased

Cost of Construction:(i) Until the property is actually re-

paired or replaced, at the same oranother premises; and

(ii) Unless the repairs or replacementare made as soon as reasonablypossible after the loss or damage,not to exceed two years. We mayextend this period in writing dur-ing the two years.

(b) If the building is repaired or replacedat the same premises, or if you electto rebuild at another premises, themost we will pay for the IncreasedCost of Construction, subject to theprovisions of e.(6) of this AdditionalCoverage, is the increased cost ofconstruction at the same premises.

(c) If the ordinance or law requires relo-cation to another premises, the mostwe will pay for the Increased Cost ofConstruction, subject to the provi-sions of e.(6) of this Additional Cov-erage, is the increased cost of con-struction at the new premises.

(8) This Additional Coverage is not subjectto the terms of the Ordinance or LawExclusion, to the extent that such Exclu-sion would conflict with the provisions ofthis Additional Coverage.

(9) The costs addressed in the Loss Pay-ment and Valuation Conditions, and theReplacement Cost Optional Coverage,in this Coverage Form, do not includethe increased cost attributable to en-forcement of an ordinance or law. Theamount payable under this AdditionalCoverage, as stated in e.(6) of this Addi-tional Coverage, is not subject to suchlimitation.

f. Electronic Data(1) Under this Additional Coverage, elec-

tronic data has the meaning describedunder Property Not Covered � ElectronicData.

(2) Subject to the provisions of this Addi-tional Coverage, we will pay for the costto replace or restore electronic datawhich has been destroyed or corruptedby a Covered Cause of Loss. To theextent that electronic data is not re-placed or restored, the loss will be val-ued at the cost of replacement of themedia on which the electronic data wasstored, with blank media of substantiallyidentical type.

(3) The Covered Causes of Loss applicableto Your Business Personal Property ap-ply to this Additional Coverage � Elec-tronic Data, subject to the following:


(a) If the Causes Of Loss � SpecialForm applies, coverage under thisAdditional Coverage � ElectronicData is limited to the "specifiedcauses of loss" as defined in thatform, and Collapse as set forth inthat form.

(b) If the Causes Of Loss � Broad Formapplies, coverage under this Addi-tional Coverage � Electronic Data in-cludes Collapse as set forth in thatform.

(c) If the Causes Of Loss Form is en-dorsed to add a Covered Cause ofLoss, the additional Covered Causeof Loss does not apply to the cover-age provided under this AdditionalCoverage � Electronic Data.

(d) The Covered Causes of Loss includea virus, harmful code or similar in-struction introduced into or enactedon a computer system (includingelectronic data) or a network to whichit is connected, designed to damageor destroy any part of the system ordisrupt its normal operation. Butthere is no coverage for loss or dam-age caused by or resulting from ma-nipulation of a computer system (in-cluding electronic data) by any em-ployee, including a temporary orleased employee, or by an entity re-tained by you or for you to inspect,design, install, modify, maintain, re-pair or replace that system.

(4) The most we will pay under this Addi-tional Coverage � Electronic Data is$2,500 for all loss or damage sustainedin any one policy year, regardless of thenumber of occurrences of loss or dam-age or the number of premises, loca-tions or computer systems involved. Ifloss payment on the first occurrencedoes not exhaust this amount, then thebalance is available for subsequent lossor damage sustained in but not after thatpolicy year. With respect to an occur-rence which begins in one policy yearand continues or results in additionalloss or damage in a subsequent policyyear(s), all loss or damage is deemed tobe sustained in the policy year in whichthe occurrence began.

5. Coverage ExtensionsExcept as otherwise provided, the followingExtensions apply to property located in or onthe building described in the Declarations or inthe open (or in a vehicle) within 100 feet of thedescribed premises.If a Coinsurance percentage of 80% or moreor, a Value Reporting period symbol, is shownin the Declarations, you may extend the insur-ance provided by this Coverage Part as follows:a. Newly Acquired Or Constructed Property

(1) BuildingsIf this policy covers Building, you mayextend that insurance to apply to:

(a) Your new buildings while being builton the described premises; and

(b) Buildings you acquire at locations,other than the described premises,intended for:(i) Similar use as the building de-

scribed in the Declarations; or(ii) Use as a warehouse.

The most we will pay for loss or damageunder this Extension is $250,000 at eachbuilding.

(2) Your Business Personal Property(a) If this policy covers Your Business

Personal Property, you may extendthat insurance to apply to:(i) Business personal property, in-

cluding such property that younewly acquire, at any location youacquire other than at fairs, tradeshows or exhibitions;

(ii) Business personal property, in-cluding such property that younewly acquire, located at yournewly constructed or acquiredbuildings at the location describedin the Declarations; or

(iii) Business personal property thatyou newly acquire, located at thedescribed premises.

The most we will pay for loss ordamage under this Extension is$100,000 at each building.

(b) This Extension does not apply to:(i) Personal property of others that is

temporarily in your possession inthe course of installing or per-forming work on such property; or


(ii) Personal property of others that istemporarily in your possession inthe course of your manufacturingor wholesaling activities.

(3) Period Of CoverageWith respect to insurance on or at eachnewly acquired or constructed property,coverage will end when any of the fol-lowing first occurs:

(a) This policy expires;(b) 30 days expire after you acquire the

property or begin construction of thatpart of the building that would qualifyas covered property; or

(c) You report values to us.We will charge you additional premiumfor values reported from the date youacquire the property or begin construc-tion of that part of the building that wouldqualify as covered property.

b. Personal Effects And Property Of OthersYou may extend the insurance that appliesto Your Business Personal Property to applyto:

(1) Personal effects owned by you, yourofficers, your partners or members, yourmanagers or your employees. This ex-tension does not apply to loss or dam-age by theft.

(2) Personal property of others in your care,custody or control.

The most we will pay for loss or damageunder this Extension is $2,500 at each de-scribed premises. Our payment for loss ofor damage to personal property of otherswill only be for the account of the owner ofthe property.

c. Valuable Papers And Records (OtherThan Electronic Data)

(1) You may extend the insurance thatapplies to Your Business PersonalProperty to apply to the cost to replaceor restore the lost information on valu-able papers and records for which dupli-cates do not exist. But this Extensiondoes not apply to valuable papers andrecords which exist as electronic data.Electronic data has the meaning de-scribed under Property Not Covered �Electronic Data.

(2) If the Causes Of Loss � Special Formapplies, coverage under this Extensionis limited to the "specified causes ofloss" as defined in that form, and Col-lapse as set forth in that form.

(3) If the Causes Of Loss � Broad Formapplies, coverage under this Extensionincludes Collapse as set forth in thatform.

(4) Under this Extension, the most we willpay to replace or restore the lost infor-mation is $2,500 at each describedpremises, unless a higher limit is shownin the Declarations. Such amount is ad-ditional insurance. We will also pay forthe cost of blank material for reproduc-ing the records (whether or not dupli-cates exist), and (when there is a dupli-cate) for the cost of labor to transcribe orcopy the records. The costs of blankmaterial and labor are subject to the ap-plicable Limit of Insurance on YourBusiness Personal Property and there-fore coverage of such costs is not addi-tional insurance.

d. Property Off-Premises(1) You may extend the insurance provided

by this Coverage Form to apply to yourCovered Property while it is away fromthe described premises, if it is:

(a) Temporarily at a location you do notown, lease or operate;

(b) In storage at a location you lease,provided the lease was executed af-ter the beginning of the current policyterm; or

(c) At any fair, trade show or exhibition.(2) This Extension does not apply to prop-

erty:(a) In or on a vehicle; or


(b) In the care, custody or control of yoursalespersons, unless the property isin such care, custody or control at afair, trade show or exhibition.

(3) The most we will pay for loss or damageunder this Extension is $10,000.

e. Outdoor PropertyYou may extend the insurance provided bythis Coverage Form to apply to your outdoorfences, radio and television antennas (in-cluding satellite dishes), signs (other thansigns attached to buildings), trees, shrubsand plants (other than "stock" of trees,shrubs or plants), including debris removalexpense, caused by or resulting from any ofthe following causes of loss if they are Cov-ered Causes of Loss:

(1) Fire;(2) Lightning;(3) Explosion;(4) Riot or Civil Commotion; or(5) Aircraft.The most we will pay for loss or damageunder this Extension is $1,000, but notmore than $250 for any one tree, shrub orplant. These limits apply to any one occur-rence, regardless of the types or number ofitems lost or damaged in that occurrence.

f. Non-Owned Detached Trailers(1) You may extend the insurance that

applies to Your Business PersonalProperty to apply to loss or damage totrailers that you do not own, providedthat:

(a) The trailer is used in your business;(b) The trailer is in your care, custody or

control at the premises described inthe Declarations; and

(c) You have a contractual responsibilityto pay for loss or damage to thetrailer.

(2) We will not pay for any loss or damagethat occurs:

(a) While the trailer is attached to anymotor vehicle or motorized convey-ance, whether or not the motor vehi-cle or motorized conveyance is inmotion;

(b) During hitching or unhitching opera-tions, or when a trailer becomes ac-cidentally unhitched from a motorvehicle or motorized conveyance.

(3) The most we will pay for loss or damageunder this Extension is $5,000, unless ahigher limit is shown in the Declarations.

(4) This insurance is excess over theamount due (whether you can collect onit or not) from any other insurance cov-ering such property.

Each of these Extensions is additional insuranceunless otherwise indicated. The Additional Condi-tion, Coinsurance, does not apply to these Exten-sions.

B. Exclusions And LimitationsSee applicable Causes of Loss Form as shown inthe Declarations.

C. Limits Of InsuranceThe most we will pay for loss or damage in anyone occurrence is the applicable Limit of Insuranceshown in the Declarations.The most we will pay for loss or damage to out-door signs attached to buildings is $1,000 per signin any one occurrence.The limits applicable to the Fire Department Serv-ice Charge and Pollutant Clean Up and RemovalAdditional Coverages are in addition to the Limitsof Insurance.Payments under the Preservation of Property Ad-ditional Coverage will not increase the applicableLimit of Insurance.

D. DeductibleIn any one occurrence of loss or damage (herein-after referred to as loss), we will first reduce theamount of loss if required by the CoinsuranceCondition or the Agreed Value Optional Coverage.If the adjusted amount of loss is less than or equalto the Deductible, we will not pay for that loss. Ifthe adjusted amount of loss exceeds the Deducti-ble, we will then subtract the Deductible from theadjusted amount of loss, and will pay the resultingamount or the Limit of Insurance, whichever isless.When the occurrence involves loss to more thanone item of Covered Property and separate Limitsof Insurance apply, the losses will not be combinedin determining application of the Deductible. Butthe Deductible will be applied only once per occur-rence.


Example No. 1:(This example assumes there is no coinsurance pen-alty.)

Deductible: $ 250Limit of Insurance � Bldg. 1: $ 60,000Limit of Insurance � Bldg. 2: $ 80,000Loss to Bldg. 1: $ 60,100Loss to Bldg. 2: $ 90,000

The amount of loss to Bldg. 1 ($60,100) is lessthan the sum ($60,250) of the Limit of Insuranceapplicable to Bldg. 1 plus the Deductible.The Deductible will be subtracted from the amountof loss in calculating the loss payable for Bldg. 1:

$ 60,100� 250$ 59,850 Loss Payable � Bldg. 1

The Deductible applies once per occurrence andtherefore is not subtracted in determining theamount of loss payable for Bldg. 2. Loss payablefor Bldg. 2 is the Limit of Insurance of $80,000.Total amount of loss payable: $59,850 + 80,000 =$139, 850

Example No. 2:(This example, too, assumes there is no coinsurancepenalty.)The Deductible and Limits of Insurance are the sameas those in Example No. 1.

Loss to Bldg. 1: $ 70,000 (exceeds Limit of Insurance plus Deductible)Loss to Bldg. 2: $ 90,000 (exceeds Limit of Insurance plus Deductible)Loss Payable � Bldg. 1: $60,000 (Limit of Insurance)Loss Payable � Bldg. 2: $80,000 (Limit of Insurance)Total amount of loss payable:

$140,000E. Loss Conditions

The following conditions apply in addition to theCommon Policy Conditions and the CommercialProperty Conditions.1. Abandonment

There can be no abandonment of any propertyto us.

2. AppraisalIf we and you disagree on the value of theproperty or the amount of loss, either maymake written demand for an appraisal of theloss. In this event, each party will select a com-petent and impartial appraiser. The two ap-praisers will select an umpire. If they cannotagree, either may request that selection bemade by a judge of a court having jurisdiction.The appraisers will state separately the value ofthe property and amount of loss. If they fail toagree, they will submit their differences to theumpire. A decision agreed to by any two will bebinding. Each party will:a. Pay its chosen appraiser; andb. Bear the other expenses of the appraisal

and umpire equally.If there is an appraisal, we will still retain ourright to deny the claim.

3. Duties In The Event Of Loss Or Damagea. You must see that the following are done in

the event of loss or damage to CoveredProperty:

(1) Notify the police if a law may have beenbroken.

(2) Give us prompt notice of the loss ordamage. Include a description of theproperty involved.

(3) As soon as possible, give us a descrip-tion of how, when and where the loss ordamage occurred.

(4) Take all reasonable steps to protect theCovered Property from further damage,and keep a record of your expensesnecessary to protect the Covered Prop-erty, for consideration in the settlementof the claim. This will not increase theLimit of Insurance. However, we will notpay for any subsequent loss or damageresulting from a cause of loss that is nota Covered Cause of Loss. Also, if feasi-ble, set the damaged property aside andin the best possible order for examina-tion.

(5) At our request, give us complete inven-tories of the damaged and undamagedproperty. Include quantities, costs, val-ues and amount of loss claimed.

(6) As often as may be reasonably required,permit us to inspect the property provingthe loss or damage and examine yourbooks and records.


Also permit us to take samples of dam-aged and undamaged property for in-spection, testing and analysis, and per-mit us to make copies from your booksand records.

(7) Send us a signed, sworn proof of losscontaining the information we request toinvestigate the claim. You must do thiswithin 60 days after our request. We willsupply you with the necessary forms.

(8) Cooperate with us in the investigation orsettlement of the claim.

b. We may examine any insured under oath,while not in the presence of any other in-sured and at such times as may be rea-sonably required, about any matter relatingto this insurance or the claim, including aninsured's books and records. In the event ofan examination, an insured's answers mustbe signed.

4. Loss Paymenta. In the event of loss or damage covered by

this Coverage Form, at our option, we willeither:

(1) Pay the value of lost or damaged prop-erty;

(2) Pay the cost of repairing or replacing thelost or damaged property, subject to b.below;

(3) Take all or any part of the property at anagreed or appraised value; or

(4) Repair, rebuild or replace the propertywith other property of like kind and qual-ity, subject to b. below.

We will determine the value of lost or dam-aged property, or the cost of its repair or re-placement, in accordance with the applica-ble terms of the Valuation Condition in thisCoverage Form or any applicable provisionwhich amends or supersedes the ValuationCondition.

b. The cost to repair, rebuild or replace doesnot include the increased cost attributable toenforcement of any ordinance or law regu-lating the construction, use or repair of anyproperty.

c. We will give notice of our intentions within30 days after we receive the sworn proof ofloss.

d. We will not pay you more than your financialinterest in the Covered Property.

e. We may adjust losses with the owners oflost or damaged property if other than you.If we pay the owners, such payments willsatisfy your claims against us for the own-ers' property. We will not pay the ownersmore than their financial interest in the Cov-ered Property.

f. We may elect to defend you against suitsarising from claims of owners of property.We will do this at our expense.

g. We will pay for covered loss or damagewithin 30 days after we receive the swornproof of loss, if you have complied with all ofthe terms of this Coverage Part and:

(1) We have reached agreement with youon the amount of loss; or

(2) An appraisal award has been made.5. Recovered Property

If either you or we recover any property afterloss settlement, that party must give the otherprompt notice. At your option, the property willbe returned to you. You must then return to usthe amount we paid to you for the property. Wewill pay recovery expenses and the expensesto repair the recovered property, subject to theLimit of Insurance.

6. Vacancya. Description Of Terms

(1) As used in this Vacancy Condition, theterm building and the term vacant havethe meanings set forth in (1)(a) and(1)(b) below:

(a) When this policy is issued to a ten-ant, and with respect to that tenant'sinterest in Covered Property, buildingmeans the unit or suite rented orleased to the tenant. Such building isvacant when it does not containenough business personal propertyto conduct customary operations.

(b) When this policy is issued to theowner or general lessee of a build-ing, building means the entire build-ing. Such building is vacant unless atleast 31% of its total square footageis:(i) Rented to a lessee or sub-lessee

and used by the lessee or sub-lessee to conduct its customaryoperations; and/or

(ii) Used by the building owner toconduct customary operations.


(2) Buildings under construction or renova-tion are not considered vacant.

b. Vacancy ProvisionsIf the building where loss or damage occurshas been vacant for more than 60 consecu-tive days before that loss or damage oc-curs:

(1) We will not pay for any loss or damagecaused by any of the following even ifthey are Covered Causes of Loss:

(a) Vandalism;(b) Sprinkler leakage, unless you have

protected the system against freez-ing;

(c) Building glass breakage;(d) Water damage;(e) Theft; or(f) Attempted theft.

(2) With respect to Covered Causes of Lossother than those listed in b.(1)(a)through b.(1)(f) above, we will reducethe amount we would otherwise pay forthe loss or damage by 15%.

7. ValuationWe will determine the value of Covered Prop-erty in the event of loss or damage as follows:a. At actual cash value as of the time of loss or

damage, except as provided in b., c., d. ande. below.

b. If the Limit of Insurance for Building satis-fies the Additional Condition, Coinsurance,and the cost to repair or replace the dam-aged building property is $2,500 or less, wewill pay the cost of building repairs or re-placement.The cost of building repairs or replacementdoes not include the increased cost attribut-able to enforcement of any ordinance or lawregulating the construction, use or repair ofany property. However, the following prop-erty will be valued at the actual cash valueeven when attached to the building:

(1) Awnings or floor coverings;(2) Appliances for refrigerating, ventilating,

cooking, dishwashing or laundering; or(3) Outdoor equipment or furniture.

c. "Stock" you have sold but not delivered atthe selling price less discounts and ex-penses you otherwise would have had.

d. Glass at the cost of replacement with safetyglazing material if required by law.

e. Tenant's Improvements and Betterments at:(1) Actual cash value of the lost or damaged

property if you make repairs promptly.(2) A proportion of your original cost if you

do not make repairs promptly. We willdetermine the proportionate value asfollows:

(a) Multiply the original cost by the num-ber of days from the loss or damageto the expiration of the lease; and

(b) Divide the amount determined in (a)above by the number of days fromthe installation of improvements tothe expiration of the lease.

If your lease contains a renewal option,the expiration of the renewal option pe-riod will replace the expiration of thelease in this procedure.

(3) Nothing if others pay for repairs or re-placement.

F. Additional ConditionsThe following conditions apply in addition to theCommon Policy Conditions and the CommercialProperty Conditions.1. Coinsurance

If a Coinsurance percentage is shown in theDeclarations, the following condition applies.a. We will not pay the full amount of any loss if

the value of Covered Property at the time ofloss times the Coinsurance percentageshown for it in the Declarations is greaterthan the Limit of Insurance for the property.Instead, we will determine the most we willpay using the following steps:

(1) Multiply the value of Covered Property atthe time of loss by the Coinsurance per-centage;

(2) Divide the Limit of Insurance of theproperty by the figure determined in Step(1);


(3) Multiply the total amount of loss, beforethe application of any deductible, by thefigure determined in Step (2); and

(4) Subtract the deductible from the figuredetermined in Step (3).

We will pay the amount determined in Step(4) or the limit of insurance, whichever isless. For the remainder, you will either haveto rely on other insurance or absorb the lossyourself.

Example No. 1 (Underinsurance):When: The value of the prop-

erty is $ 250,000The Coinsurance per-centage for it is 80%The Limit of Insurancefor it is $ 100,000The Deductible is $ 250The amount of loss is $ 40,000

Step (1): $250,000 x 80% = $200,000(the minimum amount of insurance tomeet your Coinsurance requirements)

Step (2): $100,000 ÷ $200,000 = .50Step (3): $40,000 x .50 = $20,000Step (4): $20,000 � $250 = $19,750

We will pay no more than $19,750. The remaining$20,250 is not covered.Example No. 2 (Adequate Insurance):When: The value of the prop-

erty is $ 250,000The Coinsurance per-centage for it is 80%The Limit of Insurancefor it is $ 200,000The Deductible is $ 250The amount of loss is $ 40,000

The minimum amount of insurance to meetyour Coinsurance requirement is $200,000($250,000 x 80%). Therefore, the Limit ofInsurance in this Example is adequate andno penalty applies. We will pay no morethan $39,750 ($40,000 amount of loss mi-nus the deductible of $250).

b. If one Limit of Insurance applies to two ormore separate items, this condition will ap-ply to the total of all property to which thelimit applies.

Example No. 3:

When: The value of property is:Bldg. at Location No. 1 $ 75,000Bldg. at Location No. 2 $ 100,000Personal Property atLocation No. 2 $ 75,000

$ 250,000The Coinsurance per-centage for it is 90%The Limit of Insurancefor Buildings and Per-sonal Property at Loca-tion Nos. 1 and 2 is $ 180,000The Deductible is $ 1,000The amount of loss is:Bldg. at Location No. 2 $ 30,000Personal Property atLocation No. 2. $ 20,000

$ 50,000Step (1): $250,000 x 90% = $225,000

(the minimum amount of insurance tomeet your Coinsurance requirementsand to avoid the penalty shown below)

Step (2): $180,000 ÷ $225,000 = .80Step (3): $50,000 x .80 = $40,000Step (4): $40,000 � $1,000 = $39,000

We will pay no more than $39,000. The remaining$11,000 is not covered.

2. Mortgageholdersa. The term mortgageholder includes trustee.b. We will pay for covered loss of or damage

to buildings or structures to each mortgage-holder shown in the Declarations in their or-der of precedence, as interests may appear.

c. The mortgageholder has the right to receiveloss payment even if the mortgageholderhas started foreclosure or similar action onthe building or structure.

d. If we deny your claim because of your actsor because you have failed to comply withthe terms of this Coverage Part, the mort-gageholder will still have the right to receiveloss payment if the mortgageholder:

(1) Pays any premium due under this Cov-erage Part at our request if you havefailed to do so;

(2) Submits a signed, sworn proof of losswithin 60 days after receiving noticefrom us of your failure to do so; and


(3) Has notified us of any change in owner-ship, occupancy or substantial change inrisk known to the mortgageholder.

All of the terms of this Coverage Part willthen apply directly to the mortgageholder.

e. If we pay the mortgageholder for any loss ordamage and deny payment to you becauseof your acts or because you have failed tocomply with the terms of this CoveragePart:

(1) The mortgageholder's rights under themortgage will be transferred to us to theextent of the amount we pay; and

(2) The mortgageholder's right to recoverthe full amount of the mortgageholder'sclaim will not be impaired.

At our option, we may pay to the mortgage-holder the whole principal on the mortgageplus any accrued interest. In this event, yourmortgage and note will be transferred to usand you will pay your remaining mortgagedebt to us.

f. If we cancel this policy, we will give writtennotice to the mortgageholder at least:

(1) 10 days before the effective date ofcancellation if we cancel for your non-payment of premium; or

(2) 30 days before the effective date ofcancellation if we cancel for any otherreason.

g. If we elect not to renew this policy, we willgive written notice to the mortgageholder atleast 10 days before the expiration date ofthis policy.

G. Optional CoveragesIf shown as applicable in the Declarations, the fol-lowing Optional Coverages apply separately toeach item.1. Agreed Value

a. The Additional Condition, Coinsurance,does not apply to Covered Property to whichthis Optional Coverage applies. We will payno more for loss of or damage to that prop-erty than the proportion that the Limit of In-surance under this Coverage Part for theproperty bears to the Agreed Value shownfor it in the Declarations.

b. If the expiration date for this Optional Cov-erage shown in the Declarations is not ex-tended, the Additional Condition, Coinsur-ance, is reinstated and this Optional Cover-age expires.

c. The terms of this Optional Coverage applyonly to loss or damage that occurs:

(1) On or after the effective date of thisOptional Coverage; and

(2) Before the Agreed Value expiration dateshown in the Declarations or the policyexpiration date, whichever occurs first.

2. Inflation Guarda. The Limit of Insurance for property to which

this Optional Coverage applied will auto-matically increase by the annual percentageshown in the Declarations.

b. The amount of increase will be:(1) The Limit of Insurance that applied on

the most recent of the policy inceptiondate, the policy anniversary date, or anyother policy change amending the Limitof Insurance, times

(2) The percentage of annual increaseshown in the Declarations, expressed asa decimal (example: 8% is .08), times

(3) The number of days since the beginningof the current policy year or the effectivedate of the most recent policy changeamending the Limit of Insurance, dividedby 365.

Example:If: The applicable Limit of

Insurance is $ 100,000The annual percentageincrease is 8%The number of dayssince the beginning ofthe policy year (or lastpolicy change) is 146The amount of increaseis $100,000 x .08 x 146÷ 365 = $ 3,200

3. Replacement Costa. Replacement Cost (without deduction for

depreciation) replaces Actual Cash Value inthe Loss Condition, Valuation, of this Cov-erage Form.

b. This Optional Coverage does not apply to:(1) Personal property of others;(2) Contents of a residence;


(3) Works of art, antiques or rare articles,including etchings, pictures, statuary,marbles, bronzes, porcelains and bric-a-brac; or

(4) "Stock", unless the Including "Stock"option is shown in the Declarations.

Under the terms of this Replacement CostOptional Coverage, tenants' improvementsand betterments are not considered to bethe personal property of others.

c. You may make a claim for loss or damagecovered by this insurance on an actual cashvalue basis instead of on a replacementcost basis. In the event you elect to haveloss or damage settled on an actual cashvalue basis, you may still make a claim forthe additional coverage this Optional Cov-erage provides if you notify us of your intentto do so within 180 days after the loss ordamage.

d. We will not pay on a replacement cost basisfor any loss or damage:

(1) Until the lost or damaged property isactually repaired or replaced; and

(2) Unless the repairs or replacement aremade as soon as reasonably possibleafter the loss or damage.

With respect to tenants' improvements andbetterments, the following also apply:

(3) If the conditions in d.(1) and d.(2) aboveare not met, the value of tenants' im-provements and betterments will be de-termined as a proportion of your originalcost, as set forth in the Valuation Condi-tion of this Coverage Form; and

(4) We will not pay for loss or damage totenants' improvements and bettermentsif others pay for repairs or replacement.

e. We will not pay more for loss or damage ona replacement cost basis than the least of(1), (2) or (3), subject to f. below:

(1) The Limit of Insurance applicable to thelost or damaged property;

(2) The cost to replace the lost or damagedproperty with other property:

(a) Of comparable material and quality;and

(b) Used for the same purpose; or(3) The amount actually spent that is nec-

essary to repair or replace the lost ordamaged property.

If a building is rebuilt at a new premises, thecost described in e.(2) above is limited tothe cost which would have been incurred ifthe building had been rebuilt at the originalpremises.

f. The cost of repair or replacement does notinclude the increased cost attributable toenforcement of any ordinance or law regu-lating the construction, use or repair of anyproperty.

4. Extension Of Replacement Cost ToPersonal Property Of Othersa. If the Replacement Cost Optional Coverage

is shown as applicable in the Declarations,then this Extension may also be shown asapplicable. If the Declarations show thisExtension as applicable, then Paragraph3.b.(1) of the Replacement Cost OptionalCoverage is deleted and all other provisionsof the Replacement Cost Optional Cover-age apply to replacement cost on personalproperty of others.

b. With respect to replacement cost on thepersonal property of others, the followinglimitation applies:If an item(s) of personal property of othersis subject to a written contract which gov-erns your liability for loss or damage to thatitem(s), then valuation of that item(s) will bebased on the amount for which you are li-able under such contract, but not to exceedthe lesser of the replacement cost of theproperty or the applicable Limit of Insur-ance.

H. Definitions1. "Fungus" means any type or form of fungus,

including mold or mildew, and any mycotoxins,spores, scents or by-products produced or re-leased by fungi.

2. "Pollutants" means any solid, liquid, gaseous orthermal irritant or contaminant, includingsmoke, vapor, soot, fumes, acids, alkalis,chemicals and waste. Waste includes materialsto be recycled, reconditioned or reclaimed.

3. "Stock" means merchandise held in storage orfor sale, raw materials and in-process or fin-ished goods, including supplies used in theirpacking or shipping.



BUSINESS INCOME (AND EXTRA EXPENSE)COVERAGE FORM

Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties andwhat is and is not covered.Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. Thewords "we", "us" and "our" refer to the Company providing this insurance.Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. � Definitions.A. Coverage

1. Business IncomeBusiness Income means the:a. Net Income (Net Profit or Loss before in-

come taxes) that would have been earnedor incurred; and

b. Continuing normal operating expensesincurred, including payroll.

For manufacturing risks, Net Income includesthe net sales value of production.

Coverage is provided as described and limitedbelow for one or more of the following options forwhich a Limit of Insurance is shown in the Decla-rations:a. Business Income including "Rental Value".b. Business Income other than "Rental Value".c. "Rental Value".If option a. above is selected, the term BusinessIncome will include "Rental Value". If option c.above is selected, the term Business Income willmean "Rental Value" only.If Limits of Insurance are shown under more thanone of the above options, the provisions of thisCoverage Part apply separately to each.We will pay for the actual loss of Business Incomeyou sustain due to the necessary "suspension" ofyour "operations" during the "period of restoration".The "suspension" must be caused by direct physi-cal loss of or damage to property at premiseswhich are described in the Declarations and forwhich a Business Income Limit of Insurance isshown in the Declarations. The loss or damagemust be caused by or result from a CoveredCause of Loss. With respect to loss of or damageto personal property in the open or personal prop-erty in a vehicle, the described premises includethe area within 100 feet of the site at which the de-scribed premises are located.

With respect to the requirements set forth in thepreceding paragraph, if you occupy only part of thesite at which the described premises are located,your premises means:

a. The portion of the building which you rent,lease or occupy; and

b. Any area within the building or on the site atwhich the described premises are located, ifthat area services, or is used to gain accessto, the described premises.

2. Extra Expensea. Extra Expense coverage is provided at the

premises described in the Declarations onlyif the Declarations show that Business In-come coverage applies at that premises.

b. Extra Expense means necessary expensesyou incur during the "period of restoration"that you would not have incurred if therehad been no direct physical loss or damageto property caused by or resulting from aCovered Cause of Loss.We will pay Extra Expense (other than theexpense to repair or replace property) to:

(1) Avoid or minimize the "suspension" ofbusiness and to continue operations atthe described premises or at replace-ment premises or temporary locations,including relocation expenses and coststo equip and operate the replacementlocation or temporary location.

(2) Minimize the "suspension" of business ifyou cannot continue "operations".

We will also pay Extra Expense to repair orreplace property, but only to the extent it re-duces the amount of loss that otherwisewould have been payable under this Cover-age Form.


3. Covered Causes Of Loss, Exclusions AndLimitationsSee applicable Causes of Loss Form as shownin the Declarations.

4. Additional Limitation � Interruption OfComputer Operationsa. Coverage for Business Income does not

apply when a "suspension" of "operations"is caused by destruction or corruption ofelectronic data, or any loss or damage toelectronic data, except as provided underthe Additional Coverage � Interruption OfComputer Operations.

b. Coverage for Extra Expense does not applywhen action is taken to avoid or minimize a"suspension" of "operations" caused by de-struction or corruption of electronic data, orany loss or damage to electronic data, ex-cept as provided under the Additional Cov-erage � Interruption Of Computer Opera-tions.

c. Electronic data means information, facts orcomputer programs stored as or on, createdor used on, or transmitted to or from com-puter software (including systems and ap-plications software), on hard or floppy disks,CD-ROMs, tapes, drives, cells, data proc-essing devices or any other repositories ofcomputer software which are used withelectronically controlled equipment. Theterm computer programs, referred to in theforegoing description of electronic data,means a set of related electronic instruc-tions which direct the operations and func-tions of a computer or device connected toit, which enable the computer or device toreceive, process, store, retrieve or senddata.

5. Additional Coveragesa. Civil Authority

We will pay for the actual loss of BusinessIncome you sustain and necessary ExtraExpense caused by action of civil authoritythat prohibits access to the describedpremises due to direct physical loss of ordamage to property, other than at the de-scribed premises, caused by or resultingfrom any Covered Cause of Loss.The coverage for Business Income will be-gin 72 hours after the time of that actionand will apply for a period of up to threeconsecutive weeks after coverage begins.

The coverage for Extra Expense will beginimmediately after the time of that action andwill end:

(1) 3 consecutive weeks after the time ofthat action; or

(2) When your Business Income coverageends;

whichever is later.b. Alterations And New Buildings

We will pay for the actual loss of BusinessIncome you sustain and necessary ExtraExpense you incur due to direct physicalloss or damage at the described premisescaused by or resulting from any CoveredCause of Loss to:

(1) New buildings or structures, whethercomplete or under construction;

(2) Alterations or additions to existing build-ings or structures; and

(3) Machinery, equipment, supplies orbuilding materials located on or within100 feet of the described premises and:

(a) Used in the construction, alterationsor additions; or

(b) Incidental to the occupancy of newbuildings.

If such direct physical loss or damage de-lays the start of "operations", the "period ofrestoration" for Business Income Coveragewill begin on the date "operations" wouldhave begun if the direct physical loss ordamage had not occurred.

c. Extended Business Income(1) Business Income Other Than "Rental

Value"If the necessary "suspension" of your"operations" produces a Business In-come loss payable under this policy, wewill pay for the actual loss of BusinessIncome you incur during the period that:

(a) Begins on the date property (except"finished stock") is actually repaired,rebuilt or replaced and "operations"are resumed; and

(b) Ends on the earlier of:(i) The date you could restore your

"operations", with reasonablespeed, to the level which wouldgenerate the business incomeamount that would have existed ifno direct physical loss or damagehad occurred; or


(ii) 30 consecutive days after thedate determined in (1)(a) above.

However, Extended Business Incomedoes not apply to loss of Business In-come incurred as a result of unfavorablebusiness conditions caused by the im-pact of the Covered Cause of Loss inthe area where the described premisesare located.Loss of Business Income must becaused by direct physical loss or dam-age at the described premises causedby or resulting from any Covered Causeof Loss.

(2) "Rental Value"If the necessary "suspension" of your"operations" produces a "Rental Value"loss payable under this policy, we willpay for the actual loss of "Rental Value"you incur during the period that:

(a) Begins on the date property is actu-ally repaired, rebuilt or replaced andtenantability is restored; and

(b) Ends on the earlier of:(i) The date you could restore tenant

occupancy, with reasonablespeed, to the level which wouldgenerate the "Rental Value" thatwould have existed if no directphysical loss or damage had oc-curred; or

(ii) 30 consecutive days after thedate determined in (2)(a) above.

However, Extended Business Incomedoes not apply to loss of "Rental Value"incurred as a result of unfavorable busi-ness conditions caused by the impact ofthe Covered Cause of Loss in the areawhere the described premises are lo-cated.Loss of "Rental Value" must be causedby direct physical loss or damage at thedescribed premises caused by or re-sulting from any Covered Cause of Loss.

d. Interruption Of Computer Operations(1) Under this Additional Coverage, elec-

tronic data has the meaning describedunder Additional Limitation � InterruptionOf Computer Operations.

(2) Subject to all provisions of this AdditionalCoverage, you may extend the insur-ance that applies to Business Incomeand Extra Expense to apply to a "sus-pension" of "operations" caused by aninterruption in computer operations dueto destruction or corruption of electronicdata due to a Covered Cause of Loss.

(3) With respect to the coverage providedunder this Additional Coverage, theCovered Causes of Loss are subject tothe following:

(a) If the Causes Of Loss � SpecialForm applies, coverage under thisAdditional Coverage � Interruption OfComputer Operations is limited to the"specified causes of loss" as definedin that form, and Collapse as setforth in that form.

(b) If the Causes Of Loss � Broad Formapplies, coverage under this Addi-tional Coverage � Interruption OfComputer Operations includes Col-lapse as set forth in that form.

(c) If the Causes Of Loss Form is en-dorsed to add a Covered Cause ofLoss, the additional Covered Causeof Loss does not apply to the cover-age provided under this AdditionalCoverage � Interruption Of ComputerOperations.

(d) The Covered Causes of Loss includea virus, harmful code or similar in-struction introduced into or enactedon a computer system (includingelectronic data) or a network to whichit is connected, designed to damageor destroy any part of the system ordisrupt its normal operation. Butthere is no coverage for an interrup-tion related to manipulation of acomputer system (including elec-tronic data) by any employee, in-cluding a temporary or leased em-ployee, or by an entity retained byyou or for you to inspect, design, in-stall, maintain, repair or replace thatsystem.


(4) The most we will pay under this Addi-tional Coverage � Interruption of Com-puter Operations is $2,500 for all losssustained and expense incurred in anyone policy year, regardless of the num-ber of interruptions or the number ofpremises, locations or computer sys-tems involved. If loss payment relating tothe first interruption does not exhaustthis amount, then the balance is avail-able for loss or expense sustained or in-curred as a result of subsequent inter-ruptions in that policy year. A balanceremaining at the end of a policy yeardoes not increase the amount of insur-ance in the next policy year. With re-spect to any interruption which begins inone policy year and continues or resultsin additional loss or expense in a subse-quent policy year(s), all loss and ex-pense is deemed to be sustained or in-curred in the policy year in which the in-terruption began.

(5) This Additional Coverage � Interruptionin Computer Operations does not applyto loss sustained or expense incurredafter the end of the "period of restora-tion", even if the amount of insurancestated in (4) above has not been ex-hausted.

6. Coverage ExtensionIf a Coinsurance percentage of 50% or more isshown in the Declarations, you may extend theinsurance provided by this Coverage Part asfollows:Newly Acquired Locationsa. You may extend your Business Income and

Extra Expense Coverages to apply to prop-erty at any location you acquire other thanfairs or exhibitions.

b. The most we will pay under this Extension,for the sum of Business Income loss andExtra Expense incurred, is $100,000 ateach location.

c. Insurance under this Extension for eachnewly acquired location will end when any ofthe following first occurs:

(1) This policy expires;(2) 30 days expire after you acquire or begin

to construct the property; or(3) You report values to us.We will charge you additional premium forvalues reported from the date you acquirethe property.

This Extension is additional insurance. The Ad-ditional Condition, Coinsurance, does not applyto this Extension.

B. Limits Of InsuranceThe most we will pay for loss in any one occur-rence is the applicable Limit of Insurance shown inthe Declarations.The limit applicable to the Coverage Extension isin addition to the Limit of Insurance.Payments under the following coverages will notincrease the applicable Limit of Insurance:1. Alterations and New Buildings;2. Civil Authority;3. Extra Expense; or4. Extended Business Income.

C. Loss ConditionsThe following conditions apply in addition to theCommon Policy Conditions and the CommercialProperty Conditions.1. Appraisal

If we and you disagree on the amount of NetIncome and operating expense or the amountof loss, either may make written demand for anappraisal of the loss. In this event, each partywill select a competent and impartial appraiser.The two appraisers will select an umpire. If theycannot agree, either may request that selectionbe made by a judge of a court having jurisdic-tion. The appraisers will state separately theamount of Net Income and operating expenseor amount of loss. If they fail to agree, they willsubmit their differences to the umpire. A deci-sion agreed to by any two will be binding. Eachparty will:a. Pay its chosen appraiser; andb. Bear the other expenses of the appraisal

and umpire equally.If there is an appraisal, we will still retain ourright to deny the claim.

2. Duties In The Event Of Lossa. You must see that the following are done in

the event of loss:(1) Notify the police if a law may have been

broken.(2) Give us prompt notice of the direct

physical loss or damage. Include a de-scription of the property involved.

(3) As soon as possible, give us a descrip-tion of how, when, and where the directphysical loss or damage occurred.


(4) Take all reasonable steps to protect theCovered Property from further damage,and keep a record of your expensesnecessary to protect the Covered Prop-erty, for consideration in the settlementof the claim. This will not increase theLimit of Insurance. However, we will notpay for any subsequent loss or damageresulting from a cause of loss that is nota Covered Cause of Loss. Also, if feasi-ble, set the damaged property aside andin the best possible order for examina-tion.

(5) As often as may be reasonably required,permit us to inspect the property provingthe loss or damage and examine yourbooks and records.Also permit us to take samples of dam-aged and undamaged property for in-spection, testing and analysis, and per-mit us to make copies from your booksand records.

(6) Send us a signed, sworn proof of losscontaining the information we request toinvestigate the claim. You must do thiswithin 60 days after our request. We willsupply you with the necessary forms.

(7) Cooperate with us in the investigation orsettlement of the claim.

(8) If you intend to continue your business,you must resume all or part of your "op-erations" as quickly as possible.

b. We may examine any insured under oath,while not in the presence of any other in-sured and at such times as may be rea-sonably required, about any matter relatingto this insurance or the claim, including aninsured's books and records. In the event ofan examination, an insured's answers mustbe signed.

3. Loss Determinationa. The amount of Business Income loss will be

determined based on:(1) The Net Income of the business before

the direct physical loss or damage oc-curred;

(2) The likely Net Income of the business ifno physical loss or damage had oc-curred, but not including any Net Incomethat would likely have been earned as aresult of an increase in the volume ofbusiness due to favorable business con-ditions caused by the impact of the Cov-ered Cause of Loss on customers or onother businesses;

(3) The operating expenses, including pay-roll expenses, necessary to resume "op-erations" with the same quality of servicethat existed just before the direct physi-cal loss or damage; and

(4) Other relevant sources of information,including:

(a) Your financial records and account-ing procedures;

(b) Bills, invoices and other vouchers;and

(c) Deeds, liens or contracts.b. The amount of Extra Expense will be de-

termined based on:(1) All expenses that exceed the normal

operating expenses that would havebeen incurred by "operations" during the"period of restoration" if no direct physi-cal loss or damage had occurred. Wewill deduct from the total of such ex-penses:

(a) The salvage value that remains ofany property bought for temporaryuse during the "period of restoration",once "operations" are resumed; and

(b) Any Extra Expense that is paid for byother insurance, except for insurancethat is written subject to the sameplan, terms, conditions and provi-sions as this insurance; and

(2) Necessary expenses that reduce theBusiness Income loss that otherwisewould have been incurred.

c. Resumption Of OperationsWe will reduce the amount of your:

(1) Business Income loss, other than ExtraExpense, to the extent you can resumeyour "operations", in whole or in part, byusing damaged or undamaged property(including merchandise or stock) at thedescribed premises or elsewhere.

(2) Extra Expense loss to the extent youcan return "operations" to normal anddiscontinue such Extra Expense.

d. If you do not resume "operations", or do notresume "operations" as quickly as possible,we will pay based on the length of time itwould have taken to resume "operations" asquickly as possible.


4. Loss PaymentWe will pay for covered loss within 30 days af-ter we receive the sworn proof of loss, if youhave complied with all of the terms of this Cov-erage Part and:a. We have reached agreement with you on

the amount of loss; orb. An appraisal award has been made.

D. Additional ConditionCoinsuranceIf a Coinsurance percentage is shown in the Dec-larations, the following condition applies in additionto the Common Policy Conditions and the Com-mercial Property Conditions.We will not pay the full amount of any Business In-come loss if the Limit of Insurance for Business In-come is less than:

a. The Coinsurance percentage shown forBusiness Income in the Declarations; times

b. The sum of:(1) The Net Income (Net Profit or Loss

before income taxes), and(2) Operating expenses, including payroll

expenses,that would have been earned or incurred(had no loss occurred) by your "operations"at the described premises for the 12months following the inception, or last pre-vious anniversary date, of this policy(whichever is later).

Instead, we will determine the most we will payusing the following steps:1. Multiply the Net Income and operating expense

for the 12 months following the inception, orlast previous anniversary date, of this policy bythe Coinsurance percentage;

2. Divide the Limit of Insurance for the describedpremises by the figure determined in Step 1.;and

3. Multiply the total amount of loss by the figuredetermined in Step 2.

We will pay the amount determined in Step 3. orthe limit of insurance, whichever is less. For theremainder, you will either have to rely on other in-surance or absorb the loss yourself.In determining operating expenses for the purposeof applying the Coinsurance condition, the follow-ing expenses, if applicable, shall be deducted fromthe total of all operating expenses:1. Prepaid freight � outgoing;2. Returns and allowances;3. Discounts;

4. Bad debts;5. Collection expenses;6. Cost of raw stock and factory supplies con-

sumed (including transportation charges);7. Cost of merchandise sold (including transpor-

tation charges);8. Cost of other supplies consumed (including

transportation charges);9. Cost of services purchased from outsiders (not

employees) to resell, that do not continue undercontract;

10. Power, heat and refrigeration expenses that donot continue under contract (if Form CP 15 11is attached);

11. All ordinary payroll expenses or the amount ofpayroll expense excluded (if Form CP 15 10 isattached); and

12. Special deductions for mining properties (royal-ties unless specifically included in coverage;actual depletion commonly known as unit orcost depletion � not percentage depletion;welfare and retirement fund charges based ontonnage; hired trucks).

Example No. 1 (Underinsurance):

When: The Net Income andoperating expenses forthe 12 months followingthe inception, or lastprevious anniversarydate, of this policy at thedescribed premiseswould have been $ 400,000The Coinsurance per-centage is 50%The Limit of Insurance is $ 150,000The amount of loss is $ 80,000

Step 1: $400,000 x 50% = $200,000(the minimum amount of insurance tomeet your Coinsurance requirements)

Step 2: $150,000 ÷ $200,000 = .75Step 3: $80,000 x .75 = $60,000

We will pay no more than $60,000. The remaining$20,000 is not covered.


Example No. 2 (Adequate Insurance):

When: The Net Income andoperating expenses forthe 12 months followingthe inception, or lastprevious anniversarydate, of this policy at thedescribed premises wouldhave been $ 400,000The Coinsurance per-centage is 50%The Limit of Insurance is $ 200,000The amount of loss is $ 80,000

The minimum amount of insurance to meet yourCoinsurance requirement is $200,000 ($400,000 x50%). Therefore, the Limit of Insurance in this Ex-ample is adequate and no penalty applies. We willpay no more than $80,000 (amount of loss).This condition does not apply to Extra Expensecoverage.

E. Optional CoveragesIf shown as applicable in the Declarations, the fol-lowing Optional Coverages apply separately toeach item.1. Maximum Period Of Indemnity

a. The Additional Condition, Coinsurance,does not apply to this Coverage Form at thedescribed premises to which this OptionalCoverage applies.

b. The most we will pay for the total of Busi-ness Income loss and Extra Expense is thelesser of:

(1) The amount of loss sustained and ex-penses incurred during the 120 daysimmediately following the beginning ofthe "period of restoration"; or

(2) The Limit of Insurance shown in theDeclarations.

2. Monthly Limit Of Indemnitya. The Additional Condition, Coinsurance,

does not apply to this Coverage Form at thedescribed premises to which this OptionalCoverage applies.

b. The most we will pay for loss of BusinessIncome in each period of 30 consecutivedays after the beginning of the "period ofrestoration" is:

(1) The Limit of Insurance, multiplied by(2) The fraction shown in the Declarations

for this Optional Coverage.

Example:

When: The Limit of Insurance is $ 120,000The fraction shown in theDeclarations for this Op-tional Coverage is 1/4The most we will pay forloss in each period of 30consecutive days is:$120,000 x 1/4 = $30,000If, in this example, theactual amount of loss is:Days 1-30 $ 40,000Days 31-60 20,000Days 61-90 30,000

$ 90,000We will pay:Days 1-30 $ 30,000Days 31-60 20,000Days 61-90 30,000

$ 80,000

The remaining $10,000 is not covered.3. Business Income Agreed Value

a. To activate this Optional Coverage:(1) A Business Income Report/Work Sheet

must be submitted to us and must showfinancial data for your "operations":

(a) During the 12 months prior to thedate of the Work Sheet; and

(b) Estimated for the 12 months imme-diately following the inception of thisOptional Coverage.

(2) The Declarations must indicate that theBusiness Income Agreed Value OptionalCoverage applies, and an Agreed Valuemust be shown in the Declarations. TheAgreed Value should be at least equalto:

(a) The Coinsurance percentage shownin the Declarations; multiplied by

(b) The amount of Net Income and op-erating expenses for the following 12months you report on the WorkSheet.

b. The Additional Condition, Coinsurance, issuspended until:

(1) 12 months after the effective date of thisOptional Coverage; or


(2) The expiration date of this policy;whichever occurs first.

c. We will reinstate the Additional Condition,Coinsurance, automatically if you do notsubmit a new Work Sheet and AgreedValue:

(1) Within 12 months of the effective date ofthis Optional Coverage; or

(2) When you request a change in yourBusiness Income Limit of Insurance.

d. If the Business Income Limit of Insurance isless than the Agreed Value, we will not paymore of any loss than the amount of lossmultiplied by:

(1) The Business Income Limit of Insur-ance; divided by

(2) The Agreed Value.Example:

When: The Limit of Insuranceis $ 100,000The Agreed Value is $ 200,000The amount of loss is $ 80,000

Step (a): $100,000 ÷ $200,000 = .50Step (b): .50 x $80,000 = $40,000

We will pay $40,000. The remaining $40,000 is notcovered.

4. Extended Period Of IndemnityUnder Paragraph A.5.c., Extended BusinessIncome, the number "30" in Subparagraphs(1)(b) and (2)(b) is replaced by the numbershown in the Declarations for this OptionalCoverage.

F. Definitions1. "Finished Stock" means stock you have

manufactured."Finished stock" also includes whiskey and al-coholic products being aged, unless there is aCoinsurance percentage shown for BusinessIncome in the Declarations."Finished stock" does not include stock youhave manufactured that is held for sale on thepremises of any retail outlet insured under thisCoverage Part.

2. "Operations" means:a. Your business activities occurring at the

described premises; andb. The tenantability of the described premises,

if coverage for Business Income including"Rental Value" or "Rental Value" applies.

3. "Period of Restoration" means the period oftime that:a. Begins:

(1) 72 hours after the time of direct physicalloss or damage for Business Incomecoverage; or

(2) Immediately after the time of directphysical loss or damage for Extra Ex-pense coverage;

caused by or resulting from any CoveredCause of Loss at the described premises;and

b. Ends on the earlier of:(1) The date when the property at the de-

scribed premises should be repaired,rebuilt or replaced with reasonablespeed and similar quality; or

(2) The date when business is resumed at anew permanent location.

"Period of restoration" does not include any in-creased period required due to the enforce-ment of any ordinance or law that:

(1) Regulates the construction, use or re-pair, or requires the tearing down of anyproperty; or

(2) Requires any insured or others to testfor, monitor, clean up, remove, contain,treat, detoxify or neutralize, or in anyway respond to, or assess the effects of"pollutants".

The expiration date of this policy will not cutshort the "period of restoration".

4. "Pollutants" means any solid, liquid, gaseous orthermal irritant or contaminant, includingsmoke, vapor, soot, fumes, acids, alkalis,chemicals and waste. Waste includes materialsto be recycled, reconditioned or reclaimed.

5. "Rental Value" means Business Income thatconsists of:a. Net Income (Net Profit or Loss before in-

come taxes) that would have been earnedor incurred as rental income from tenantoccupancy of the premises described in theDeclarations as furnished and equipped byyou, including fair rental value of any portionof the described premises which is occupiedby you; and

b. Continuing normal operating expensesincurred in connection with that premises,including:

(1) Payroll; and(2) The amount of charges which are the

legal obligation of the tenant(s) butwould otherwise be your obligations.


6. "Suspension" means:a. The slowdown or cessation of your busi-

ness activities; orb. That a part or all of the described premises

is rendered untenantable, if coverage forBusiness Income including "Rental Value"or "Rental Value" applies.

POLICY NUMBER: COMMERCIAL PROPERTYCP 15 45 04 02

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

CP 15 45 04 02 © ISO Properties, Inc., 2001 Page 1 of 2

UTILITY SERVICES � TIME ELEMENTThis endorsement modifies insurance provided under the following:

BUSINESS INCOME (AND EXTRA EXPENSE) COVERAGE FORMBUSINESS INCOME (WITHOUT EXTRA EXPENSE) COVERAGE FORMEXTRA EXPENSE COVERAGE FORM

SCHEDULE*

WaterSupplyProperty

CommunicationSupply Property(not includingoverheadtransmissionlines)

CommunicationSupply Property(including over-head transmissionlines)

PowerSupplyProperty(not includingoverheadtransmissionlines)

PowerSupplyProperty(includingoverheadtransmissionlines)

� � � � �

Prem.No.

Bldg.No.

Causes OfLoss FormApplicable

Utility ServicesLimit Of

Insurance

*Information required to complete this Schedule, if not shown on this endorsement, will be shown in the Declara-tions.

A. CoverageYour coverage for Business Income and/or ExtraExpense, as provided and limited in the applicableCoverage Form, is extended to apply to a "sus-pension" of "operations" at the described premisescaused by an interruption in utility service to thatpremises. The interruption in utility service mustresult from direct physical loss or damage by aCovered Cause of Loss (as indicated in theSchedule) to the property described in ParagraphC. if such property is indicated by an "X" in theSchedule and is located outside of a coveredbuilding described in the Declarations.

B. ExceptionCoverage under this endorsement does not applyto Business Income loss or Extra Expense relatedto interruption in utility service which causes lossor damage to electronic data, including destructionor corruption of electronic data. The term elec-tronic data has the meaning set forth in the Cover-age Form to which this endorsement applies.

of 2 © ISO Properties, Inc., 2001 CP 15 45 04 02

C. Utility Services1. Water Supply Services, meaning the following

types of property supplying water to the de-scribed premises:a. Pumping stations; andb. Water mains.

2. Communication Supply Services, meaningproperty supplying communication services, in-cluding telephone, radio, microwave or televi-sion services, to the described premises, suchas:a. Communication transmission lines, includ-

ing optic fiber transmission lines;b. Coaxial cables; andc. Microwave radio relays except satellites.It does not include overhead transmission linesunless indicated by an "X" in the Schedule.

3. Power Supply Services, meaning the follow-ing types of property supplying electricity,steam or gas to the described premises:a. Utility generating plants;b. Switching stations;c. Substations;d. Transformers; ande. Transmission lines.It does not include overhead transmission linesunless indicated by an "X" in the Schedule.

D. The Coinsurance Additional Condition does notapply to this endorsement.

E. The Utility Services Limit of Insurance, as shown inthe Schedule, is the only Limit which applies to thecoverage provided under this endorsement, and ispart of, not in addition to, the Limit of Insurancestated in the Declarations as applicable to the de-scribed premises.

POLICY NUMBER: COMMERCIAL PROPERTYCP 04 05 04 02

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.


ORDINANCE OR LAW COVERAGEThis endorsement modifies insurance provided under the following:

BUILDING AND PERSONAL PROPERTY COVERAGE FORMCONDOMINIUM ASSOCIATION COVERAGE FORMSTANDARD PROPERTY POLICY

SCHEDULE*

Bldg. No./Prem. No. Cov. A

Cov. BLimit

Of Insur.

Cov. CLimit

Of Insur.

Cov. B And CCombined Limit

Of Insur./ � $ $ $ **/ � $ $ $ **/ � $ $ $ **

*Information required to complete the Schedule, if not shown on this endorsement, will be shown in the Declara-tions.**Do not enter a Combined Limit of Insurance if individual Limits of Insurance are selected for Coverages B andC, or if one of these Coverages is not applicable.

A. Each Coverage � Coverage A, Coverage B andCoverage C � is provided under this endorsementonly if that Coverage(s) is chosen by entry in theabove Schedule and then only with respect to thebuilding identified for that Coverage(s) in theSchedule.

B. Application Of Coverage(s)The Coverage(s) provided by this endorsementapply only if both B.1. and B.2. are satisfied andare then subject to the qualifications set forth inB.3.1. The ordinance or law:

a. Regulates the demolition, construction orrepair of buildings, or establishes zoning orland use requirements at the describedpremises; and

b. Is in force at the time of loss.But coverage under this endorsement applies onlyin response to the minimum requirements of theordinance or law. Losses and costs incurred incomplying with recommended actions or standardsthat exceed actual requirements are not coveredunder this endorsement.

2.a. The building sustains direct physical dam-age that is covered under this policy andsuch damage results in enforcement of theordinance or law; or

b. The building sustains both direct physicaldamage that is covered under this policyand direct physical damage that is not cov-ered under this policy, and the buildingdamage in its entirety results in enforce-ment of the ordinance or law.

c. But if the building sustains direct physicaldamage that is not covered under this pol-icy, and such damage is the subject of theordinance or law, then there is no coverageunder this endorsement even if the buildinghas also sustained covered direct physicaldamage.

3. In the situation described in B.2.b. above, wewill not pay the full amount of loss otherwisepayable under the terms of Coverages A, B,and/or C of this endorsement. Instead, we willpay a proportion of such loss; meaning theproportion that the covered direct physicaldamage bears to the total direct physical dam-age.


(Section H. of this endorsement provides anexample of this procedure.)However, if the covered direct physical dam-age, alone, would have resulted in enforcementof the ordinance or law, then we will pay the fullamount of loss otherwise payable under theterms of Coverages A, B and/or C of this en-dorsement.

C. We will not pay under Coverage A, B or C of thisendorsement for:1. Enforcement of any ordinance or law which

requires the demolition, repair, replacement,reconstruction, remodeling or remediation ofproperty due to contamination by "pollutants" ordue to the presence, growth, proliferation,spread or any activity of "fungus", wet or dry rotor bacteria; or

2. The costs associated with the enforcement ofany ordinance or law which requires any in-sured or others to test for, monitor, clean up,remove, contain, treat, detoxify or neutralize, orin any way respond to, or assess the effects of"pollutants", "fungus", wet or dry rot or bacteria.

D. Coverage1. Coverage A � Coverage For Loss To The

Undamaged Portion Of The BuildingWith respect to the building that has sustainedcovered direct physical damage, we will payunder Coverage A for the loss in value of theundamaged portion of the building as a conse-quence of enforcement of an ordinance or lawthat requires demolition of undamaged parts ofthe same building.Coverage A is included within the Limit of In-surance shown in the Declarations as applica-ble to the covered building. Coverage A doesnot increase the Limit of Insurance.

2. Coverage B � Demolition Cost CoverageWith respect to the building that has sustainedcovered direct physical damage, we will pay thecost to demolish and clear the site of undam-aged parts of the same building, as a conse-quence of enforcement of an ordinance or lawthat requires demolition of such undamagedproperty.The Coinsurance Additional Condition does notapply to Demolition Cost Coverage.

3. Coverage C � Increased Cost OfConstruction Coveragea. With respect to the building that has sus-

tained covered direct physical damage, wewill pay the increased cost to:

(1) Repair or reconstruct damaged portionsof that building; and/or

(2) Reconstruct or remodel undamagedportions of that building, whether or notdemolition is required;

when the increased cost is a consequenceof enforcement of the minimum require-ments of the ordinance or law.However:

(1) This coverage applies only if the re-stored or remodeled property is intendedfor similar occupancy as the currentproperty, unless such occupancy is notpermitted by zoning or land use ordi-nance or law.

(2) We will not pay for the increased cost ofconstruction if the building is not re-paired, reconstructed or remodeled.

The Coinsurance Additional Condition doesnot apply to Increased Cost of ConstructionCoverage.

b. When a building is damaged or destroyedand Coverage C applies to that building inaccordance with 3.a. above, coverage forthe increased cost of construction also ap-plies to repair or reconstruction of the fol-lowing, subject to the same conditionsstated in 3.a.:

(1) The cost of excavations, grading, back-filling and filling;

(2) Foundation of the building;(3) Pilings; and(4) Underground pipes, flues and drains.The items listed in b.(1) through b.(4) aboveare deleted from Property Not Covered, butonly with respect to the coverage describedin this Provision, 3.b.

E. Loss Payment1. All following loss payment Provisions, E.2.

through E.5., are subject to the apportionmentprocedures set forth in Section B.3. of this en-dorsement.


2. When there is a loss in value of an undamagedportion of a building to which Coverage A ap-plies, the loss payment for that building, in-cluding damaged and undamaged portions, willbe determined as follows:a. If the Replacement Cost Coverage Option

applies and the property is being repaired orreplaced, on the same or another premises,we will not pay more than the lesser of:

(1) The amount you would actually spend torepair, rebuild or reconstruct the build-ing, but not for more than the amount itwould cost to restore the building on thesame premises and to the same height,floor area, style and comparable qualityof the original property insured; or

(2) The Limit of Insurance shown in theDeclarations as applicable to the cov-ered building.

b. If the Replacement Cost Coverage Optionapplies and the property is not repaired orreplaced, or if the Replacement Cost Cov-erage Option does not apply, we will notpay more than the lesser of:

(1) The actual cash value of the building atthe time of loss; or

(2) The Limit of Insurance shown in theDeclarations as applicable to the cov-ered building.

3. Unless Paragraph E.5. applies, loss paymentunder Coverage B � Demolition Cost Coveragewill be determined as follows:We will not pay more than the lesser of the fol-lowing:a. The amount you actually spend to demolish

and clear the site of the described prem-ises; or

b. The applicable Limit of Insurance shown forCoverage B in the Schedule above.

4. Unless Paragraph E.5. applies, loss paymentunder Coverage C � Increased Cost of Con-struction Coverage will be determined as fol-lows:a. We will not pay under Coverage C:

(1) Until the property is actually repaired orreplaced, at the same or another prem-ises; and

(2) Unless the repairs or replacement aremade as soon as reasonably possibleafter the loss or damage, not to exceedtwo years. We may extend this period inwriting during the two years.

b. If the building is repaired or replaced at thesame premises, or if you elect to rebuild atanother premises, the most we will pay un-der Coverage C is the lesser of:

(1) The increased cost of construction at thesame premises; or

(2) The applicable Limit of Insurance shownfor Coverage C in the Schedule above.

c. If the ordinance or law requires relocation toanother premises, the most we will pay un-der Coverage C is the lesser of:

(1) The increased cost of construction at thenew premises; or

(2) The applicable Limit of Insurance shownfor Coverage C in the Schedule above.

5. If a Combined Limit of Insurance is shown forCoverages B and C in the Schedule above,Paragraphs E.3. and E.4. of this endorsementdo not apply with respect to the building that issubject to the Combined Limit, and the follow-ing loss payment provisions apply instead:The most we will pay, for the total of all coveredlosses for Demolition Cost and Increased Costof Construction, is the Combined Limit of In-surance shown for Coverages B and C in theSchedule above. Subject to this CombinedLimit of Insurance, the following loss paymentprovisions apply:a. For Demolition Cost, we will not pay more

than the amount you actually spend to de-molish and clear the site of the describedpremises.

b. With respect to the Increased Cost of Con-struction:

(1) We will not pay for the increased cost ofconstruction:

(a) Until the property is actually repairedor replaced, at the same or anotherpremises; and

(b) Unless the repairs or replacementare made as soon as reasonablypossible after the loss or damage,not to exceed two years. We mayextend this period in writing duringthe two years.

(2) If the building is repaired or replaced atthe same premises, or if you elect to re-build at another premises, the most wewill pay for the increased cost of con-struction is the increased cost of con-struction at the same premises.


(3) If the ordinance or law requires reloca-tion to another premises, the most wewill pay for the increased cost of con-struction is the increased cost of con-struction at the new premises.

F. The terms of this endorsement apply separately toeach building to which this endorsement applies.

G. Under this endorsement we will not pay for lossdue to any ordinance or law that:1. You were required to comply with before the

loss, even if the building was undamaged; and2. You failed to comply with.

H. Example of Proportionate Loss Payment for Ordi-nance Or Law Coverage Losses (procedure as setforth in Section B.3. of this endorsement.)Assume:� Wind is a Covered Cause of Loss; Flood is an

excluded Cause of Loss� The building has a value of $200,000� Total direct physical damage to building:

$100,000� The ordinance or law in this jurisdiction is en-

forced when building damage equals or ex-ceeds 50% of the building's value

� Portion of direct physical damage that is cov-ered (caused by wind): $30,000

� Portion of direct physical damage that is notcovered (caused by flood): $70,000

� Loss under Ordinance Or Law Coverage C ofthis endorsement: $60,000

Step 1:Determine the proportion that the covered di-rect physical damage bears to the total directphysical damage.

$30,000 ÷ $100,000 = .30Step 2:

Apply that proportion to the Ordinance or Lawloss.

$60,000 x .30 = $18,000In this example, the most we will pay under thisendorsement for the Coverage C loss is $18,000,subject to the applicable Limit of Insurance andany other applicable provisions.Note: The same procedure applies to losses un-der Coverages A and B of this endorsement.

I. The following definition is added:"Fungus" means any type or form of fungus, in-cluding mold or mildew, and any mycotoxins,spores, scents or by-products produced or re-leased by fungi.

COMMERCIAL PROPERTY

CP 00 90 07 88 Copyright, ISO Commercial Risk Services, Inc., 1983, 1987 Page 1 of 2 oo

COMMERCIAL PROPERTY CONDITIONS

This Coverage Part is subject to the following conditions, the Common Policy Conditions and applicable LossConditions and Additional Conditions in Commercial Property Coverage Forms.

A. CONCEALMENT, MISREPRESENTATION ORFRAUD

This Coverage Part is void in any case of fraud byyou as it relates to this Coverage Part at any time.It is also void if you or any other insured, at anytime, intentionally conceal or misrepresent a ma-terial fact concerning:

1. This Coverage Part;

2. The Covered Property;

3. Your interest in the Covered Property; or

4. A claim under this Coverage Part.

B. CONTROL OF PROPERTY

Any act or neglect of any person other than youbeyond your direction or control will not affect thisinsurance.

The breach of any condition of this Coverage Partat any one or more locations will not affect cover-age at any location where, at the time of loss ordamage, the breach of condition does not exist.

C. INSURANCE UNDER TWO OR MORE COVER-AGES

If two or more of this policy's coverages apply tothe same loss or damage, we will not pay morethan the actual amount of the loss or damage.

D. LEGAL ACTION AGAINST US

No one may bring a legal action against us underthis Coverage Part unless:

1. There has been full compliance with all of theterms of this Coverage Part; and

2. The action is brought within 2 years after thedate on which the direct physical loss or dam-age occurred.

E. LIBERALIZATION

If we adopt any revision that would broaden thecoverage under this Coverage Part without addi-tional premium within 45 days prior to or duringthe policy period, the broadened coverage willimmediately apply to this Coverage Part.

F. NO BENEFIT TO BAILEE

No person or organization, other than you, havingcustody of Covered Property will benefit from thisinsurance.

G. OTHER INSURANCE

1. You may have other insurance subject to thesame plan, terms, conditions and provisions asthe insurance under this Coverage Part. If youdo, we will pay our share of the covered loss ordamage. Our share is the proportion that theapplicable Limit of Insurance under this Cov-erage Part bears to the Limits of Insurance ofall insurance covering on the same basis.

2. If there is other insurance covering the sameloss or damage, other than that described in 1.above, we will pay only for the amount of cov-ered loss or damage in excess of the amountdue from that other insurance, whether youcan collect on it or not. But we will not paymore than the applicable Limit of Insurance.

H. POLICY PERIOD, COVERAGE TERRITORY

Under this Coverage Part:

1. We cover loss or damage commencing:

a. During the policy period shown in the Dec-larations; and

b. Within the coverage territory.

2. The coverage territory is:

a. The United States of America (including itsterritories and possessions);

b. Puerto Rico; and

c. Canada.

of 2 Copyright, ISO Commercial Risk Services, Inc., 1983, 1987 CP 00 90 07 88 oo

I. TRANSFER OF RIGHTS OF RECOVERYAGAINST OTHERS TO US

If any person or organization to or for whom wemake payment under this Coverage Part hasrights to recover damages from another, thoserights are transferred to us to the extent of ourpayment. That person or organization must doeverything necessary to secure our rights andmust do nothing after loss to impair them. But youmay waive your rights against another party inwriting:

1. Prior to a loss to your Covered Property orCovered Income.

2. After a loss to your Covered Property or Cov-ered Income only if, at time of loss, that partyis one of the following:

a. Someone insured by this insurance;

b. A business firm:

(1) Owned or controlled by you; or

(2) That owns or controls you; or

c. Your tenant.

This will not restrict your insurance.

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