CO 1223–COMMERCIAL OUTPUT PROGRAM FLOOD ENDORSEMENT

(July 2025)

INTRODUCTION

This is not a separate coverage part. This is an endorsement and subject to all the terms and conditions in CO 1000 – Commercial Output Program – Property Coverage Part.

Mobile equipment, Supplemental Marine Coverages, and computers are not included in this endorsement. However, this does not affect coverage, as these items are listed as exceptions under the Excluded Peril of flood in the CO 1000 – Commercial Output Program – Property Coverage Part.

Only the following sections in the CO 1000 are modified:

• Additional Definitions
• Perils Covered
• Perils Excluded
• How Much We Pay

SCHEDULE OF COVERAGES

Coverage for Flood is indicated on either the CO 1050–Schedule of Coverages or the CO 1051–Schedule of Coverages by placing a checkmark beside either Scheduled Flood Coverage or Blanket Flood Coverage. If the Scheduled Flood Coverage is selected, CO 1063–Flood Schedule must also be attached.

The CO 1063 restricts coverage to only the scheduled locations and provides a specific occurrence and aggregate limit for each listed location.

ADDITIONAL DEFINITIONS

Three additional definitions apply to coverage provided by this endorsement.

Aggregate Limit

This is the most paid for all losses at a single covered location in each 12-month policy period. The 12-month policy period could end early because of policy expiration or anniversary date.

Occurrence Limit

This is the most paid for a loss at a single covered location in a single occurrence.

Catastrophe Limit

This is the most paid for all losses at all covered locations in each 12-month policy period. The 12-month policy period could end early because of policy expiration or anniversary date.

Example: Grant Warehousing has three covered facilities at various locations along the Ohio River. Grant selects flood limits of $10,000,000 for each occurrence, $20,000,000 in the aggregate and $40,000,000 as the catastrophe limit. During a single 12-month policy period, the following losses occur:

• Location 1 consists of a number of buildings, and one incurs $12,000,000 in covered flood damage. Since the occurrence limit is $10,000,000, $2,000,000 of this loss is unpaid by the insurance company.
• A second flood occurs at Location 1 that destroys another building. The building is worth $8,000,000, and the loss is completely covered because the amount of damage is less than the $10,000,000 occurrence limit.
• A third flood occurs at Location 1 that causes $5,000,000 in damage to another building. Because the sum of the previous two losses was $18,000,000, only $2,000,000 of the aggregate is available to apply to the third loss.

Additionally, no coverage is available at this location for the remainder of the policy period because its aggregate limit has been exhausted. $20,000,000 remains available for the other locations for the duration of that policy period.

PERILS COVERED

Flood coverage is added as follows:

Scheduled Flood Coverage

When the Scheduled Flood Coverage option is selected on the CO 1050 or CO 1051, it provides coverage for direct physical loss or damage to covered property caused by flood, but only for the property and limits specified at the locations entered on CO 1063–Flood Schedule. The flood exclusion still applies to all other locations, coverages, and property.

Blanket Flood Coverage

When the Blanket Flood Coverage option is selected on the CO 1050 or CO 1051, direct physical loss or damage to covered property caused by flood applies. There is no limitation for coverage or locations except the territorial limitations within the property coverage part.

PERILS EXCLUDED

The Flood exclusion in the property coverage part is deleted in its entirety.

NOTE: Remember Exclusion 1.h, Sewer Backup and Water below the Surface continues to apply.

HOW MUCH WE PAY

The following items are added to the How Much We Pay section in the property coverage part:

1. Deductible

This replaces the deductible condition in the property coverage form, but only for losses covered by the flood peril. Only the amount of a covered flood loss that exceeds the deductible shown on the Schedule of Coverages is payable. Deductibles can be expressed as specific dollar amounts or as a percentage. When the percentage is selected, the deductible amount is determined by multiplying the displayed percentage by the value of the covered property at the time of loss.

This Flood deductible replaces any other flood-related deductible mentioned in the policy.

Example: The COP written for Foley’s Furniture has a $2,000,000 limit of insurance for stock and a flood deductible of 2%. The value of the stock at the time of loss is actually $5,000,000. The deductible is determined by multiplying the stock value, not the limit, by the deductible percentage. In this case, the stock value of $5,000,000, multiplied by 2%, results in a deductible amount of $100,000. The insured must pay $100,000 before the insurance company makes any payment on the remaining loss.

2. Limits That Apply to Scheduled Flood Coverage

This item applies when Scheduled Flood Coverage is selected on either of the Schedules of Coverage, and CO 1063–Flood Schedule is attached. The limits that apply to loss or damage to covered property due to flood are as follows:

• The most paid for a single occurrence at a covered location is the occurrence limit for that location on CO 1063–Flood Schedule. There is no coverage if the location or the property damaged is not listed.
• The most paid during a 12-month period for covered flood losses at a covered location is the aggregate limit on CO 1063–Flood Schedule for that location. There is no coverage if the location or the property damaged is not listed.
• The most paid during a 12-month period for all covered flood losses at all covered locations on CO 1063–Flood Schedule is the catastrophe limit on either CO 1050 or CO 1051–Schedule of Coverages.

3. Limits That Apply to Blanket Flood Coverage

This item applies if Blanket Flood Coverage is selected on either of the Schedules of Coverages. The limits that apply to loss or damage to covered property due to flood are as follows:

• The most paid for a single occurrence at a covered location is the occurrence limit on the Schedule of Coverages.
• The most paid for all losses at a covered location during a 12-month period is the aggregate limit on the Schedule of Coverages.
• The most paid for the sum of all losses at all covered locations during a 12-month period is the catastrophe limit on the Schedule of Coverages.

4. Excess Insurance and Other Insurance

If additional Flood coverage is purchased as excess or if this Flood coverage is purchased as excess, the proportional sharing specified in How Much We Pay in the CO 1000 – Commercial Output Program – Property Coverage Part, under the section Insurance Under More than One Policy, will not apply.

Examples:

Scenario 1: Marty has 10 locations. Five are located in a floodplain. The insurance company requires that the maximum coverage be purchased from the National Flood Insurance Program (NFIP) for those locations. It agrees to provide the coverage in this endorsement for all locations as excess over the NFIP covered locations. When a loss occurs, Marty must first receive a settlement from the NFIP before this policy will respond.

Scenario 2: Patrick has a limit of $50,000,000 across four locations. His insurance company is unwilling to provide coverage exceeding $10,000,000 at a single location. He purchases a Difference In Conditions (DIC) policy to provide the excess coverage. When a loss occurs, this policy will respond up to $10,000,000, and the DIC carrier will respond for the remainder.