INTRODUCTION

When a mining operation purchases business income coverage, it must use the Insurance Services Office (ISO) CP 15 24–Mining Properties–Business Income endorsement. Additionally, mining operations must select one of the three underground coverage options available on the schedule.

This form can be used with either of the following:

· CP 00 30 – Business Income Coverage Form (including Extra Expense)

· CP 00 32 – Business Income Coverage Form (excluding Extra Expense)

SCHEDULE

For each premises number listed on the declarations, one of the following three options must be selected.

No Underground Coverage
Limited Underground Coverage
Broad Underground Coverage

A. COVERAGE

No Underground Coverage

Selecting this option means coverage excludes business income losses caused by direct physical loss or damage to property in underground mines. However, if the business income loss results from damage to property outside the underground mines, coverage applies, even if the underground damage was the direct cause of the above-ground loss.

Limited Underground Coverage

Selecting this option means coverage includes loss of business income resulting from direct physical damage or loss to mining machinery and equipment due to a covered cause of loss, as detailed in CP 15 24. However, Business Income coverage only begins once access to the mining machinery and equipment has been restored.

Broad Underground Coverage

Selecting this option means coverage includes business income loss resulting from direct physical damage or loss to mining machinery and equipment caused by a covered cause of loss, as detailed in CP 15 24. It also covers losses preventing the restoration or resumption of operations if access to the machinery is blocked by damage to mine shafts, entrances, or passages caused by a covered event.

Coverage for this option begins when the direct loss occurs, extends through repair, and ends once the equipment is replaced or restored, or when the policy limit is exhausted.

B. PROPERTY NOT COVERED

Coverage excludes any loss of business income due to direct physical damage to commissaries, commissary warehouses, dwellings, or other properties that are not part of the mining plant's production support.

C. DEFINITIONS

This section updates the definitions in the business income coverage form. It redefines one existing term and introduces a new definition specific to mining operations.

· Finished Stock

This definition is redefined to refer to the material the insured mines or processes.

· Mining Machinery and Equipment

This term is new and provides coverage for the following items, provided the property is underground.

· Fan houses

· Shops

· Rolling stock

· Elevators

· Machinery

· Electric substations

RATING AND PREMIUM CALCULATIONS

ISO provides a specific set of factors for calculating business income premiums for underground mining operations. If there is no underground coverage, no extra charge is applied. When limited or broad underground coverage is selected, a particular rate is calculated by multiplying the relevant loss cost factor by the insurance company's loss cost loading factor. This rate is then added to the business income rate.

The combined rate is used to determine the premium by multiplying it by the business income limit.