ISO CAPITAL ASSETS PROGRAM COVERAGE FORM (OUTPUT POLICY) AVAILABLE ENDORSEMENTS AND THEIR USES

(December 2022)

INTRODUCTION

This list identifies endorsements by form number and title that are available to modify or include with the Insurance Services Office (ISO) Capital Assets Program Coverage Form (Output Policy). It is arranged by form number and title; it includes a brief explanation for the use of each form.

New endorsements and changes to existing endorsements are in bold print.

Note: This list does not include any state specific forms, endorsements, changes or amendments.

FORM NUMBERING

The ten-digit numbering sequence of ISO forms and endorsements has a very specific meaning.

The first two entries are alphabetical characters that indicate the line of insurance involved. For example, OP denotes Capital Assets Coverage Form (Output Policy).
The next two digits designate the specific insurance category. Additional detail and information on these categories is in the next section below.
The next two digits are the form or endorsement number within the insurance category.
The last four digits are the edition date of the form or endorsement expressed in month and year format. This analysis does not use these digits.

CATEGORIES

Endorsements are grouped in categories according to their purpose, as follows:

Category OP DS–Declarations And Schedules

Category OP IN–Index

Category OP 03–Deductibles

Category OP 04–Additional Coverage Endorsements

Category OP 09–Terrorism Endorsements

Category OP 10–Causes Of Loss Endorsements

Category OP 12–Loss Payable Provisions

Category OP 13–Value Reporting Endorsements

Category OP 14–Additional Property Coverages/Miscellaneous Endorsements

Category OP 15–Time Element Endorsements

Category OP 99–Special Provisions

Category IL–Interline Forms And Endorsements

CATEGORY OP DS–DECLARATIONS AND SCHEDULES

OP DS 01–Capital Assets Program (Output Policy) Declarations

This advisory declarations is used with OP 00 01–Capital Assets Program Coverage Form (Output Policy).

OP DS 02–Supplemental Declarations

This advisory supplemental declarations is used with OP DS 01–Capital Assets Program (Output Policy) Declarations to provide limits of insurance for specific coverages and types of property.

OP DS 03–Flood Coverage Schedule (04 13 changes)

This advisory schedule is used when flood coverage is provided.

Related Article: OP 10 04–Flood Coverage

OP DS 04–Earthquake–Volcanic Eruption Coverage Schedule

This advisory schedule is used when earthquake and volcanic eruption coverage is provided.

CATEGORY OP IN–INDEX

OP IN 01–Capital Assets Program Coverage Form (Output Policy) Index

This alphabetical index identifies various items and their page-number location in OP 00 01–Capital Assets Program Coverage Form (Output Policy).

CATEGORY OP 03–DEDUCTIBLES

OP 03 01–Multiple Deductibles

This endorsement allows the named insured to customize deductibles. They can be modified by location, building, property covered, and cause of loss. The maximum deductible in any occurrence is the highest deductible that applies, even if multiple locations and different causes of loss are involved. It is not used to modify percentage deductible arrangements for earthquake, flood, windstorm, hail, theft, or vandalism.

OP 03 07–Windstorm or Hail Percentage Deductible

This endorsement adds a windstorm or hail deductible. The endorsement schedule explains the properties it applies to and how it is calculated.

CATEGORY OP 04–ADDITIONAL COVERAGE ENDORSEMENTS

OP 04 01–Below Ground Water and Backup of Sewer and Drain Coverage (04 13 change)

OP 00 01 specifically excludes loss or damage due to water that backs up from a sewer or drain, sump pump system failure, and from water that seeps or flows through underground structures such as foundations and basements. This endorsement modifies the exclusion and covers loss or damage to covered property due to water, mud, or waterborne material for a $50,000 limit per occurrence. Higher limits are available. When a sump pump fails because of a power failure, coverage is provided, but only if OP 04 06–Utility Services–Direct Damage is attached, and power failure coverage is provided.

OP 04 02–Transit Backhaul

OP 00 01 excludes property of others the named insured transports or hauls as a carrier for hire. This endorsement deletes that exclusion on property for which the named insured is legally liable as a carrier for hire, as long as the property is in its care, custody, and control and is in or on vehicles it operates. This is an extension of Additional Coverage–Property in Transit in OP 00 01.

OP 04 03–Vehicle Physical Damage Coverage

OP 00 01 excludes most vehicles as covered property. This endorsement amends the coverage form and provides limited coverage for certain listed and described vehicles, subject to specific limits and deductibles.

OP 04 04–Protective Safeguards (04 13 change)

When a premium is partially based on certain properly operating protective safeguards, the insurance company usually requires or warrants that they are in proper operating condition for the full policy term. This endorsement is used to warrant that sprinkler systems, fire alarm systems, burglar alarm systems, commercial cooking extinguishing systems, security systems, security services, or others listed and described on the endorsement schedule remain in working order. Loss or damage due to fire and theft is excluded if the specified protective device or devices are not operating properly at the time of loss.

OP 04 05–Spoilage Coverage

This endorsement covers the named insured's perishable property and similar property of others in its care, custody, or control against loss or damage due to breakdown, contamination, mechanical failure, and/or power interruption. The limit of insurance, deductible, and causes of loss are scheduled on the endorsement. Other entries state whether or not a refrigeration maintenance contract is in place and if coverage is subject to a refrigeration back-up system warranty.

OP 04 06–Utility Services–Direct Damage (04 13 change)

This endorsement eliminates the utility service exclusion by providing coverage for loss or damage caused when off-site utility services fail. The services that can be covered are water, communications (with or without overhead lines), and power supply (with or without overhead lines). Any combination of services may be covered. The limit is part of, and not in addition to, the limit of insurance and is an extension of coverage, not an additional coverage. The term “transmission lines” is expanded to include distribution lines.

OP 04 08–Electronic Commerce (E-Commerce)

This endorsement covers the named insured's actual loss of business income and/or extra expense incurred related to its electronic commerce described on the endorsement schedule with respect to its electronic data.

OP 04 09–Increase in Rebuilding Expenses Following Disaster (Additional Expense Coverage on Annual Aggregate Basis) (04 13 addition)

This is an anticipatory endorsement. It applies only if a loss occurs as part of an event that involves federal or state authorities declaring a state of disaster. The limit of insurance is increased for the scheduled building by the percentage entered on the endorsement schedule to pay the rebuilding surcharge that often accompanies such disasters because labor and materials are in high demand. An unusual part of this endorsement is that it is an annual aggregate. This means that if two or more disasters occur in the same year, the maximum paid is one additional expense percentage limit.

OP 04 10–Leasehold Interest Coverage

This endorsement covers the named insured's loss of covered leasehold interest when its lease is cancelled.

Related Article: OP 04 10–Leasehold Interest Coverage

OP 04 13–Equipment Breakdown Protection Coverage

This endorsement covers direct physical loss or damage to covered property at covered locations caused by or that results from breakdown of covered equipment.

OP 04 14–Suspension/Reinstatement of Coverage

When OP 04 13–Equipment Breakdown Protection Coverage is on the policy, this endorsement can be used to suspend coverage on one or more pieces of covered equipment. It is also used to reinstate coverage on the same equipment.

Note: If a company inspector suspends coverage on a piece of equipment, it is immediate and applies whether or not this endorsement has been attached.

OP 04 15–Limited Coverage for Specified Equipment

This is a limitation of the OP 04 13–Equipment Breakdown Protection Coverage endorsement.

OP 04 16–Production Machinery Exclusion

This endorsement is used with OP 04 13–Equipment Breakdown Protection Coverage. It excludes production or process machinery and apparatus and any related equipment.

OP 04 17–Diagnostic Equipment Coverage

This endorsement is used with OP 04 13–Equipment Breakdown Protection Coverage. It deletes the exclusion for diagnostic and related equipment and covers such equipment.

OP 04 19–Railroad Rolling Stock Coverage

This endorsement covers the named insured's railroad rolling stock as well as the similar property of others in its care, custody, or control. It has its own limits, coinsurance provisions, and deductibles. There is also an option to revise the valuation so that it is based on Association of American Railroads (AAR) rules.

OP 04 20–Functional Business Personal Property, Machinery, and Equipment Valuation

When the named insured plans to replace its business personal property, machinery or equipment with items of significantly lower value, this endorsement should be used. The named insured must describe the items subject to this endorsement and provide a limit of insurance for the item. If a loss occurs, the item will be replaced with a closely equivalent item instead of one of like kind and quality. When used with a named insured that has a clear plan of replacing existing items, the endorsement can be a very practical solution in rightsizing insurance values.

Related Article: Functional Property Valuations

OP 04 21–Functional Building Valuation

When the named insured plans to replace its building with a building that more closely matches its needs, this endorsement should be used. The named insured must describe the buildings subject to this endorsement and provide a limit of insurance. If a loss occurs, the building will be replaced with a functional equivalent item instead of one of like kind and quality. When used with a named insured has a clear plan of replacing existing items the endorsement can be a very practical solution in rightsizing insurance values.

Related Article: Functional Property Valuations

OP 04 22–Vacancy and Unoccupancy Changes

This endorsement changes the requirement that a building must be at least 31% occupied to not be considered vacant or unoccupied for only the building scheduled on this endorsement. The percentage at the scheduled building can be reduced to as little as 10%.

OP 04 23–Vacancy and Unoccupancy Permit

The Vacancy and Unoccupancy Condition in the policy suspends coverage for loss due to certain causes of loss and applies a 15% loss payment penalty to all other losses when buildings are vacant or unoccupied for more than 60 days. This endorsement eliminates that condition for the scheduled locations but only during the listed time period.

OP 04 24–Warehouse Operators Legal Liability Coverage

Warehouse operators can purchase this coverage that covers only the personal property of others. The coverage is limited to only the named insured’s legal liability for direct physical damage to the covered property. This is further limited to only loss due to a covered cause of loss.

OP 04 27–Increased Cost of Loss and Related Expenses for Green Upgrades

This endorsement provides a percentage increase to be used to upgrade the building to green standards following a loss. It also extends the period of restoration for business income and extra expense because of the extra time needed to implement the changes.

OP 04 54–Limited Coverage for Unmanned Aircraft (Scheduled and/or Blanket Coverage) (12 16 addition)

Coverage applies for unmanned aircraft (commonly called drones). Coverage does not apply while the aircraft is being used for delivery purposes or in any type of contest or race. Coverage can be blanket or scheduled and can include business income coverage. The schedule is a part of the endorsement.

OP 09–TERRORISM ENDORSEMENTS

OP 09 03–Cap on Losses from Certified Acts of Terrorism

OP 09 04–Exclusion of Certified Acts of Terrorism: Coverage for Certain Fire Losses

OP 09 20–Conditional Exclusion of Terrorism (Relating to Disposition of Federal Terrorism Risk Insurance Act)

OP 09 21–Conditional Exclusion of Terrorism Involving Nuclear, Biological, or Chemical Terrorism (Relating to Disposition of Federal Terrorism Risk Insurance Act)

OP 09 22–Conditional Limitation of Coverage for Terrorism–Sub-Limit on Annual Aggregate Basis (Relating to Disposition of Federal Terrorism Risk Insurance Act)

OP 09 23–Exclusion of Terrorism

OP 09 24–Exclusion of Terrorism Involving Nuclear, Biological, or Chemical Terrorism

OP 09 25–Limitation of Coverage for Terrorism–Sub-Limit on Annual Aggregate Basis

CATEGORY OP 10–CAUSES OF LOSS ENDORSEMENTS

OP 10 01–Earthquake–Volcanic Eruption

This endorsement is used only with OP DS 04–Earthquake–Volcanic Eruption Coverage Schedule.

OP 10 02–Earthquake Inception Extension

Loss or damage in the current policy year is covered even if the earthquake or volcanic eruption that causes the loss or damage began up to 72 hours prior to the policy inception. This applies only to coverage provided by OP 10 01–Earthquake-Volcanic Eruption.

OP 10 03–False Pretense Coverage

Loss caused by an insured or employee being misled or tricked into giving up possession of covered property is excluded in the unendorsed policy. Coverage for such false pretense loss is provided up to the limit of insurance on the schedule when this endorsement is attached.

OP 10 04–Flood Coverage

This endorsement is used only with OP DS 03–Flood Coverage Schedule.

Related Article: OP 10 04–Flood Coverage

OP 10 05–Theft Exclusion (04 13 change)

Theft can be a difficult cause of loss to insure on a risk that is otherwise acceptable. This endorsement solves that problem by excluding loss due to theft while still covering loss or damage caused by or that result from riot-related looting and building damage caused by burglars entering or exiting the premises. It applies only to the locations listed on the endorsement schedule.

OP 10 12–Radioactive Contamination

This endorsement covers losses caused by accidental and sudden radioactive contamination at the location(s) on the endorsement schedule. It also covers subsequent radiation damage that results from material stored or used at such locations. However, there is no coverage if the location has a nuclear reactor or any nuclear fuel.

Note: Hospitals and manufacturing plants are some classes of business that may need this coverage.

OP 10 13–Vandalism Exclusion

This endorsement excludes vandalism as a covered cause of loss at the location(s) and for the covered property described on the endorsement schedule. However, if vandalism results in a covered cause of loss, coverage applies to the loss or damage it causes. Vandalism is deleted from the definition of Specified Causes of Loss when this endorsement is used.

OP 10 14–Windstorm Or Hail Exclusion

This endorsement excludes windstorm or hail as covered causes of loss at the location(s) and for the covered property described on the endorsement schedule. However, if either results in a covered cause of loss other than rain, snow, sleet, sand, or dust, coverage applies to the resulting loss or damage. Windstorm or hail is deleted from the definition of Specified Causes of Loss when this endorsement is used.

OP 10 15–Watercraft Exclusion

This endorsement excludes loss or damage when a watercraft makes contact with retaining walls, piers, wharves, docks, pilings, and bulkheads.

OP 10 16–Exclusions of Loss Due to By-products of Production or Processing Operations (Rental Properties) (04 13 addition)

A tenant’s operations may produce vapor, gas, smoke, or other substances as a regular part of production. This endorsement excludes any damage to the named insured’s property as a result of such tenant releases. This applies to meth-house situations, grease residue, and other substances. This applies to the buildings and locations on the endorsement schedule.

OP 10 17–Limitations on Coverage for Roof Surfacing (04 13 addition)

This is a restriction of coverage. It contains two potential limitations. The first changes valuation on roofs from replacement cost to actual cash value. The second excludes loss or damage by wind or hail to the roof when the loss or damage is considered to be only superficial or cosmetic. The premises must be scheduled along with the limitation selection(s).

CATEGORY OP 12–LOSS PAYABLE PROVISIONS

OP 12 01–Loss Payable Provisions

The named insured may not gain financially from any loss. Correspondingly, when it does not own certain property outright, either because it is leased or is collateral on a loan, it does not have the right to its full value if it is damaged or destroyed. Other parties that have a financial interest in this property usually require that the named insured provide coverage for their interests as well as its own. This endorsement lists those other interests and explains how losses are adjusted and paid to them.

OP 12 10–Additional Insured–Building Owner

This endorsement is used to identify and include the building owner as a named insured under its tenant's building coverage.

OP 12 11–Joint or Disputed Loss Agreement

This endorsement states the procedures to be followed and the payments to be made involving losses where one insurance company writes this coverage form and a different one writes Equipment Breakdown Coverage.

OP 13–VALUE REPORTING ENDORSEMENTS

OP 13 01–Value Reporting Form

Value reporting is how the named insured never pays for higher limits than it needs on covered business personal property but is still adequately insured to value. An unusual feature of this endorsement is that buildings are also eligible for reporting.

CATEGORY OP 14–ADDITIONAL PROPERTY COVERAGES/MISCELLANEOUS ENDORSEMENTS

OP 14 01–Scheduled Location

This endorsement changes coverage from on a blanket basis to applying in the traditional scheduled basis but only for locations on the endorsement schedule. This allows the named insured to retain the flexibility of blanket coverage for some locations and have the more rigid scheduled basis apply to others. Provisions for newly acquired or constructed property are added because such property is covered automatically when blanket coverage applies; it does not automatically apply for scheduled property. It also introduces coinsurance provisions and penalties for direct damage coverage. Automatic increase, agreed value, and other valuation options can also be selected for the designated locations. Preservation of Property is part of this endorsement. It insures covered property that must be moved from a covered location to keep it from loss or damage by a covered cause of loss. This coverage pays for any loss or damage to such property during and following the move.

OP 14 02–Property and Additional Coverage Exclusion

This endorsement enables the named insured and the insurance company to exclude certain covered property or additional coverages. It is used to tailor the coverage form to respond to different situations and for different reasons.

Example: Renaissance Appliance's policy insures its main factory. The walls in the lobby are lined with a number of expensive original oil paintings. Because Renaissance covers these paintings under a separate Fine Arts policy, it uses this endorsement to delete the Additional Coverage on Fine Arts and eliminates duplicate coverage on the paintings.

OP 14 04–Blanket Coverage per Schedule on File

This endorsement restricts the blanket limit of insurance to apply to only the locations on the endorsement schedule or to the locations on file with the insurance company. As a result, it adds coverage for building and business personal property at newly acquired or constructed property for limits of $1,000,000 for each building. Newly acquired or constructed locations must be reported to the insurance company and premium paid within 90 days from the date of acquisition or construction.

OP 14 05–Scheduled Mobile Equipment

The blanket coverage for mobile equipment is restricted to only the scheduled specific items of mobile equipment and their limits. The limit entered is the only one that applies to that particular equipment item. However, the endorsement does not revise the Valuation Loss Condition, and any loss payment is still subject to it.

CATEGORY OP 15–TIME ELEMENT ENDORSEMENTS

OP 15 01–Business Income and Extra Expense Caused by Dependent Properties–Broad Form (04 13 change)

This endorsement replaces the dependent property additional coverage in the coverage form. Only losses due to the described dependent locations are covered, whether contributing, recipient, manufacturing, or leader locations. If a loss occurs at any listed location due to a covered cause of loss, the full Business Income and Extra Expense limit that applies at the named insured's locations that are dependent on that scheduled location. Coverage can be extended to include loss due to direct damage at a secondary dependent property.

The following commercial property article is helpful in understanding dependent property coverage.

OP 15 02–Business Income and Extra Expense Caused by Dependent Properties–Limited Form (04 13 change)

This endorsement is similar to OP 15 01 except that a separate and specific limit of insurance for business income and extra expense is needed for each listed dependent property location. That limit is a separate Business Income limit of insurance. Coverage can be extended to include loss due to direct damage at a secondary dependent property.

The following commercial property article is helpful in understanding dependent property coverage.

OP 15 03–Business Income Changes–Educational Institutions

Educational institutions are unique because they must be prepared and ready when the school year begins. If they are not, most students will attend other schools until the next semester, quarter, or academic year. This endorsement changes the period of restoration to reflect the reality of this situation. The period of restoration begins at the same time as the covered physical loss or damage. However, it does not end when the repairs are complete, and the insured resumes operations. It ends on the day before the start of the next school term after the repairs are complete.

Example: A covered loss occurs on 04/01/2022, but the repairs take until 11/01/2022 to complete. The school term runs from 09/01/2022 to 05/31/2023. As a result, the period of restoration ends on 08/31/2023.

The following commercial property article is helpful in understanding educational institutions business income needs and coverage.

OP 15 04–Business Income Report/Worksheet (04 13 change)

This worksheet helps the named insured determine the appropriate limit of insurance to carry and also to satisfy the coverage forms reporting requirement. It is mandatory when business income is written on an agreed value basis and must be resubmitted at each anniversary.

Note: The 04 13 change is a minor change in wording that does not affect coverage.

The following commercial property article is helpful in understanding how to complete this worksheet.

OP 15 05–Utility Services–Time Element (04 13 change)

Business Income and Extra Expense Coverage can be extended to cover losses caused by or that result from failure of off-site utility services. The services that can be covered are water, wastewater removal, communications (with or without overhead lines), and power supply (with or without overhead lines). Any combination of services may be covered. The limit is part of the limit of insurance, not in addition to it, and is an extension of coverage, not an additional coverage.

OP 15 06–Limited Worldwide Business Income and Extra Expense Coverages

This endorsement extends the Business Income and Extra Expense coverage territory to any place in the world. It does not include property in transit or at locations the named insured owns, leases, or operates. The limit is $50,000. Coverage is restricted to the countries or jurisdictions on the endorsement schedule. Coverage disputes must be filed in courts of law in the United States, including its territories and possessions, Puerto Rico, or Canada.

OP 15 07–Payroll Limitation or Exclusion (04 13 change)

This endorsement allows the insured to completely exclude payroll expenses for selected groups of employees. The expenses may be totally excluded or be limited to only a certain number of days. The 04 13 edition eliminates the term “ordinary payroll” and increases flexibility by introducing scheduling options. This approach means that the insured can carry a lower limit of insurance in return for a premium surcharge. Coverage applies to payroll expense incurred during the period of restoration or any extensions of it. The number of days of payroll coverage is not required to be consecutive.

OP 15 08–Power, Heat, and Refrigeration Deduction

This endorsement enables the named insured to deduct the cost of power, heat, and refrigeration consumed in production operations from the time element limit when those costs do not continue under contract after a loss occurs. This lets the named insured purchase lower limits without incurring a coinsurance penalty.

OP 15 09–Discretionary Payroll Expense

This endorsement provides coverage for job classifications or specific employees described and for the number of days on the endorsement schedule without requiring them to be necessary to resume operations.

OP 15 12–Off Covered Location Interruption of Business – Vehicles and Mobile Equipment (02 14 addition)

The loss of income due to interruption of the named insured’s operations because a scheduled vehicle or mobile equipment is covered when the loss is due to covered causes of loss. Collision and/or overturn can be added as a cause of loss by scheduling it on the endorsement.

CATEGORY OP 99–SPECIAL PROVISIONS

OP 99 01–Alcoholic Beverages Tax Exclusion

Alcoholic beverages are subject to significant federal and state taxes that are paid in advance. These taxes are refunded if a loss prevents them from entering the marketplace. As a result, the limit of insurance for any alcoholic beverage entity should exclude the taxes. The problem with this is that these taxes are not refunded if the loss is due to theft. This endorsement recognizes the problem and allows these taxes to be excluded for everything except theft losses.

The following commercial property article is helpful in understanding this endorsement.

OP 99 02–Manufacturer’s Selling Price (Finished Stock) Only

Stock that is sold but not delivered is valued at its selling price in this coverage form. All other stock is therefore valued at its replacement cost. This endorsement changes the valuation for finished stock so that it is also subject to the selling price valuation rather than replacement cost. All other stock remains on the replacement cost valuation.

OP 99 03–Distilled Spirits and Wines Market Value

This endorsement recognizes that alcoholic beverages are unique. It values distilled spirits and wines at their current market value but goes even further and recognizes the difference between more aged and less aged bulk distilled spirits and irreplaceable bulk distilled spirits. Anyone who works with wineries or any business involved with alcoholic beverages should review this endorsement carefully.

The following commercial property article is helpful in understanding this endorsement.

OP 99 04–Amendment of Coverage Territory–Business Personal Property off Covered Location

This restrictive endorsement excludes Business Personal Property Off Covered Location Additional Coverage when such property is in the countries or jurisdictions listed on the endorsement schedule.

OP 99 05–Tentative Rate

This endorsement is a hedge that should be used only when sufficient time is not available to adequately evaluate new construction. A rate is developed based on available knowledge. After the needed additional information is developed, the actual rate is determined, and because of this endorsement, that amended rate is applied retroactively to the coverage inception date.

OP 99 07–Cannabis Exclusion (12 19 addition)

Related Article: Cannabis Exclusion Endorsements

OP 99 08–Cannabis Exclusion with Hemp Exception (12 19 addition)

Related Article: Cannabis Exclusion Endorsements

CATEGORY IL–INTERLINE ENDORSEMENTS

IL 00 03–Calculation of Premium

This endorsement is used on multi-year or continuous policies to inform the insured that the premiums are subject to annual review, re-rating, and adjustment.