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.
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.
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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:
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Property Description
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Step 1.
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Step 2.
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Step 3.
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Coverage
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Owned floor coverings
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Yes
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Yes
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No
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Covered
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Owned grills and storage bins
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Yes
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Yes
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No
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Covered
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Stock
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Yes
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Yes
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No
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Covered
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$5,000 in cash
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Yes
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Yes
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Yes
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Not Covered
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Borrowed desk and cabinets
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Yes
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No
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Yes
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Not Covered
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a. Building
Building is the first type of covered
property. The following property is covered in addition to the actual building
or structure listed on the declarations:
Note: This means an
addition to the described structure during the policy term is covered even
though it did not exist at policy inception.
