CP DS 00–COMMERCIAL
PROPERTY (TIME ELEMENT) COVERAGE PART DECLARATIONS
(December 2025)
The CP DS 00–Commercial
Property Coverage Part Declarations is an advisory form developed by ISO in
2000 that has remained unchanged since its creation. While many insurance
companies modify it to meet their particular needs, many sections remain
consistent with the original ISO version, as the coverage form references them.
The declaration page
summarizes important information about the insured property and policy
coverages. It features sections for optional coverages, mortgageholders
details, deductibles, and relevant forms. This declaration page is intended for
a single location, so a separate form, CP DS 01, is required for each
additional risk.
Related Article: CP DS 00–Commercial
Property Coverage Part Declarations
NOTE: This analysis focuses only on the
elements relating directly to time element coverages.
This section contains
fields for the policy number and coverage effective date. It also features a
checkbox to specify if there are multiple locations and more than one
Supplemental Declarations.
The named insured must
be accurately listed, as coverage is only granted to them. An incorrect name
might invalidate the coverage if there is no evidence of a financial interest.
When multiple insureds
are listed, the first name shown has additional rights and responsibilities.
However, all insureds have the same coverage. If the declarations page lacks
space for all names, they can be added through a separate endorsement.
The insured premises
should be described as accurately and thoroughly as possible from the start. An
incorrect or imprecise address or description might result in coverage denial.
Sometimes, claims are rejected due to mistaken addresses.
Although details about
the building's construction and occupancy are helpful and important, they alone
do not suffice to establish or verify coverage.
Related Court Case: Business Income Held
Not Applicable to Building Not Scheduled for Such Coverage
The location or
premises details and relevant building numbers are taken from the description
of premises, followed by the listing of coverage. The options for time element
coverage are:
Multiple coverages can
be included, but each selected coverage must have an associated insurance limit
entered to be valid.
A
causes of loss form must be chosen for each coverage, as different coverages
might require different forms. For example, the causes of loss form for
Business Income could be different from those for leasehold interest or the
building. To avoid confusion, the correct causes of loss form should be entered
for every coverage.
Certain entries vary by
the type of coverage form:
If an agreed value is
used, the coinsurance percentage for that coverage and location must still be
entered. This is because the policy defaults to a coinsurance basis on the
declarations in either of the cases below:
The basic recovery
basis allows for up to 40% in the first month, up to 80% cumulatively in the
second month, and up to 100% cumulatively in the third month, recorded on the
declarations as 40/80/100.
Other recovery basis
options are available, but the final number entered will always be 100.
The applicable rate(s)
can be entered in the provided spaces, but they are usually left blank.
The available business
income options on the declarations are:
This option requires a
signed and dated business income report or worksheet, valid for one year. It
must include coverage, insurance limit, and expiration date. If these details
are not updated by the end of the period or if a new worksheet is not received,
coverage will default to a coinsurance basis, as outlined in the declarations.
When choosing this
option, you must select one of three possible fractions: 1/3, 1/4, or 1/6.
An 'X' must be placed
in the provided space when selecting this option.
Choosing this optional
coverage increases the duration during which you can receive business income
benefits after restarting operations. The policy offers an additional 60 days,
with additional optional days available in increments of 30.
NOTE: Agreed Value, Monthly Limit of Indemnity,
and Maximum Period of Indemnity are mutually exclusive. Only one of them
applies at any given time to a specific location.
The Business Income
Coverage Extension allows for an increase in the automatic limit. This new
limit should be recorded on the declarations; however, the CP DS 00 form does
not have a dedicated space for it. As a result, the insurance carrier must
update its version of CP DS 00 to include these entries.
Alternatively, form CP
04 08–Higher Limits can be attached, which was introduced to address this issue
and specify the increased limit there.
This section appears at
the bottom of the declarations page. The initial area is designated for forms applying
to all coverages, while the next line is for specific forms indicating certain
coverages or coverages for particular locations.
This schedule must be
attached when the CP 00 60–Leasehold Interest Coverage Form is used. It is a
supplement to CP DS 00, not a replacement. Only one lease can be entered. If Leasehold
Interest coverage applies to multiple locations, either location-specific
information must be added to this schedule and multiple schedules attached, or an
alternative form that provides the same information must be used.
Enter the start and end
dates of the lease(s). Additionally, specify the remaining months in the lease
as of the start date.
An interest rate must be specified.
Additionally, a CP interest schedule showing the leasehold interest used for
any loss settlement should be included.
|
Example: A 10% interest rate is entered on CP DS 07. CP 60
10–Leasehold Interest Factors for 10.0% must be attached to the policy. |
The entries are as
follows:
This shows the
difference between the monthly lease payment made by the named insured and the
current monthly rental value of the lease.
This indicates the
Gross Leasehold Interest multiplied by the Monthly Leasehold Interest Factor as
of the start date.
The premium is
developed by multiplying the Net Leasehold Interest at inception by the rate.
This is the most the
insurance company will pay for a loss due to cancellation of any one lease. The
entries are as follows:
This is the original
cost divided by the number of months remaining in the lease when the costs were
incurred.
This is the Monthly
Leasehold Interest multiplied by the remaining months of the lease from the
start date.
The premium is
calculated by multiplying the Net Leasehold Interest at the start by the rate.
The Net Leasehold Interest at Inception
entries are combined to determine a total, and the premium entries are combined
to determine a total.