INTRODUCTION

The Insurance Services Office (ISO) Commercial Property Program Causes of Loss Forms are designed to complete the coverage that the coverage form provides. The separate causes of loss forms allow the insured to customize its coverage. After selecting the appropriate coverage, the insured then selects a causes of loss form for each insured property. This gives it maximum flexibility to arrange its insurance coverage.

The Causes of Loss Forms answer the question, "What must happen in order for coverage to apply?" The more causes of loss provided, the more expensive the policy. The three Causes of Loss forms are:

• CP 10 10–Causes of Loss–Basic Form
• CP 10 20–Causes of Loss–Broad Form
• CP 10 30–Causes of Loss–Special Form

The form used most often is CP 10 30–Causes of Loss–Special Form. For this reason, this analysis builds on this form. The other two forms are analyzed at the end of this section, with emphasis on how they differ from CP 10 30.

Related Article: ISO Commercial Property Causes of Loss Comparison

Note: This analysis is based on the 10 12 edition of each form. Changes from the previous edition are in bold print.

D. ADDITIONAL COVERAGE–COLLAPSE

This additional coverage is necessary because the coverage form specifically excludes collapse. Policies and coverage forms once provided collapse coverage. However, broad legal interpretations forced rewriting collapse coverage as a named cause of loss.

1. Collapse coverage applies to abrupt collapse. As used in this coverage, abrupt collapse means that the building or part of the building first abruptly falls down or caves in. As a result of such falling down or caving in, the building or part of the building cannot be occupied for its intended purpose.

2. Payment for such abrupt collapse as described in item 1. is for only direct physical damage to the collapsed building or business personal property inside the building. However, payment is made only if any of the following cause the collapse:

a. Hidden decay. This is as long as the insured was not aware of the hidden decay prior to the collapse.

b. Hidden insect or vermin damage. This is only if the insured was not aware of the hidden insect or vermin damage prior to the collapse.

c. Defective construction material or construction methods. This is only if the collapse occurs while a building is being built, remodeled, or renovated.

d. Defective construction material or construction methods. This is only if the collapse occurs after a building is being built, remodeled, or renovated, provided that one of the following contributed to the collapse:

·         Items a. or b. of this paragraph

·         Specified cause of loss

·         Glass breakage

·         Weight of people or personal property

·         Weight of rain that collects on a roof

3. There is no coverage for any of the following:

• A building or any part of a building in danger of falling down or caving in
• A part of a building that remains standing even if it has separated from another part of the building
• A building or part of a building that is standing but shows evidence that it may collapse due to bulging, sagging, cracking, bending, leaning, settling, shrinking, or expanding

Related Court Case: Policy Is Ambiguous About Collapse

4. The following property is covered only if it is considered covered property, the loss or damage is due to collapse of a covered building, and items 2.a through 2d above cause the collapse:

• Outdoor radio or television antennas
• Awnings, gutters, and downspouts
• Yard fixtures
• Outdoor swimming pools
• Fences
• Pier, wharves, and docks
• Beach or diving platforms or appurtenances
• Retaining walls
• Roadways, walks, and paved surfaces

5. There is coverage if personal property abruptly falls down (but the building it is situated in does not) if all of the following apply:

• The collapse was due to a cause of loss listed in 2.a through 2.d above.
• The personal property that collapsed is in a building.
• The personal property is not one of the types listed in 4. above.

Coverage does not apply if the only damage to the personal property is marring or scratching.

6. Any cracking, bulging, sagging, leaning, settling, expanding, or shrinking of personal property is not treated as collapse. Coverage applies only if the personal property either abruptly fell down or caved in.

7. This additional coverage does not increase the coverage part limit of insurance.

8. Whenever the term "covered cause of loss" is used throughout this coverage form, this Additional Coverage–Collapse is included, subject to the description and limitations this additional coverage provides.