(June
2019)
This
analysis is based on the 10 12 edition of this coverage form. Changes from the
06 07 edition are in bold print.
INTRODUCTION
This
coverage form opens by defining the terms "you or your" as the named
insured and "we, us, and our" as the company that provides the insurance
coverage. Named insured is not defined. As a result, it means only entities
listed or named on the declarations. If a given entity is not listed, there is
no coverage for its property except as personal property of others, if
scheduled. This coverage form has other words that have special meanings. They
are defined in H. Definitions.
A. COVERAGE
The
coverage form obligates the insurance company to pay for direct physical loss
or damage to certain types of property. The property must be at a location listed
or described on the declarations. However, this is not open-ended coverage. The
loss or damage must be the result of a cause of loss described in the causes of
loss form attached to the policy in order for coverage to apply.
Related Article:
Basic, Broad and Special Causes of Loss Forms Analysis
Coverage
applies to only loss or damage that occurs at a definite place and time. There
is no coverage for a loss event that is not tangible or that is not capable of
being measured.
The
reference to premises means that coverage applies to only property located in
or on the premises listed or described on the declarations. This is why the
declarations is a very important document. Coverage does not apply if the
location and type of property is not properly listed or described.
Covered Property is defined in two ways. In the first,
the coverage form lists the types of property eligible for coverage. In the
second, it provides information on the types of property not eligible for
coverage. One way to determine if an item is covered is to take the following
steps:
Step 1. Is the item described in the
listings provided under Building, Your Personal Property, or Personal Property
of Others? If the answer is no, there is no coverage. If yes, continue to Step
2.
Step 2. Is there a limit of insurance on the
declarations for the qualifying type of property? If the answer is no, there is
no coverage. If the answer is yes, continue to Step 3.
Step 3. Is the item of the type of property
described in Property Not Covered? If the answer is yes, there is no coverage.
If the answer is no, this coverage form should cover that item.
|
Example: Lydia’s declarations has a $50,000 limit of insurance for
business personal property. There are no other limits on the declarations.
When Lydia has a loss, she determines the items that are covered by using the
step method described above:
|
Property Description
|
Step 1.
|
Step 2.
|
Step 3.
|
Coverage
|
|
Owned floor coverings
|
Yes
|
Yes
|
No
|
Covered
|
|
Owned grills and storage bins
|
Yes
|
Yes
|
No
|
Covered
|
|
Stock
|
Yes
|
Yes
|
No
|
Covered
|
|
$5,000 in cash
|
Yes
|
Yes
|
Yes
|
Not Covered
|
|
Borrowed desk and cabinets
|
Yes
|
No
|
Yes
|
Not Covered
|
|
