MARKET SEGMENTS DIVISION—GOLF COURSES

(February 2023)

Collapsible Index

Eligibility

MS GC DS–Golf Courses Supplemental Schedule

MS GC 01–Golf Courses Analysis

I. Modifications To CP 00 10–Building And Personal Property Coverage Form

II. Modifications To CP 10 30–Causes Of Loss–Special Form

III. Changes To The Commercial General Liability Coverage Part

IV. Definitions

Endorsements

Underwriting Considerations

Rating Considerations

The Golf Courses Program is an enhancement of the Commercial Package Policy. This article will discuss items specific to the Golf Courses Program, including the eligibility, supplemental schedule, MS GC 01–Golf Courses, and applicable special endorsements. In addition, there is a section on underwriting and rating.

This article is based on the 07 13 edition of this program. Changes from the prior edition are in bold print.

Related Article: ISO Market Segment Overview

ELIGIBILITY

This program is available only for applicants using the following general liability class codes:

When the named insured’s operations require additional classifications, the named insured continues to be eligible for this program. According to ISO, no operations would make a risk ineligible. However, each insurance carrier must establish its own underwriting guidelines.

MS GC DS–GOLF COURSES SUPPLEMENTAL SCHEDULE

This is a discussion about the specific information that must appear on a Supplemental Schedule for the Golf Courses Program.

Changes in Limits

This section's only purpose is to increase insurance limits. If no limit is entered, the limits shown in the MS GC 01 apply. Any limit changes are effective on a per location basis. This allows protection for one or two locations to be increased without affecting the remaining locations.

A list of specific coverages appears in this section. Space is also available for entering a coverage to be defined and a limit of insurance for it. The coverages are:

o    On-premises Limit

o    Off-premises Limit

o    Per Occurrence Limit

o    Per Guest Limit

Note: According to the coverage form, whatever limit is entered is a replacement (not an additional) limit. If an insured wants $5,000 in coverage and the existing limit is $2,500, a limit of $5,000 must simply be entered on the schedule to get the desired level of coverage.

Hired and Non-Owned Auto Liability Insurance

If coverage is desired the box must be checked and MS GC 03–Golf Courses-Hired Auto and Non-owned Auto Liability Insurance attached. The limits can be entered on this Supplemental Schedule or on the schedule that is included on the MS GC 04 form. Separate insurance limits apply for these two coverages.

Loss or Damage to Guests’ Autos Section

The insured has two options regarding coverage for loss or damage to customers’ autos. If this coverage is needed a check must be placed in either Direct or Legal Liability Coverage, and then a limit and deductibles must be entered by premises. The items that must be entered are:

MS GC 05 must be attached if direct coverage is selected, and MS GC 06 must be attached if legal liability is selected.

Fine Arts Coverage

In order for this optional coverage to apply, a premises and premium must be entered, and the MS GC 08–Golf Courses-Fine Arts Coverage must be attached.

Restaurants and Refreshment Stands–Spoilage and Food Contamination Coverage

If this coverage is selected, the premises number must be entered along with the parts of the coverages that are desired, along with a limit for each one that is selected. MS GC 09 must be attached.

Forms Applicable

The final section of the Supplemental Schedule allows for a listing of specific endorsements by premises.

MS GC 01–GOLF COURSES ANALYSIS

The opening paragraph of the Golf Courses endorsement says that it modifies the following coverage and causes of loss forms:

The Golf Courses endorsement is not a complete coverage. It must be attached to a package containing all three of the above forms.

I. Modifications to CP00 10– Building and Personal Property Coverage Form

A. Coverage Addition

The term premises, as used in this endorsement, is the property upon which the golf resides. This includes property that is deeded to the golf course and leased by the golf course.

B. Property Covered Additions

Any reference to a covered building is amended to include both above- and below-ground fuel storage tanks. The related piping, connections plus the pumps and electrical equipment that go with the pumps are also part of the covered building.

The Property Not Covered section is revised to eliminate the reference to the types of underground pipes, flues, and drains that are covered in this Addition paragraph.

C. Property Not Covered Modifications

The following property is barred from coverage:

1. Property that is kept in storage at a location other than the covered premises. However, there is coverage for property in storage under the Coverage Extensions. This should not be considered a reduction in coverage, though. The standard policy does not provide coverage for Property Off Premises, so this is just a clarification that protection exists under the policy's Coverage Extensions section.

2. Any computer that has been permanently installed in any of the following types of vehicles is not covered property:

D. Additional Coverages Modifications

1. Money and Securities

Coverage is added for direct loss by theft, disappearance, or destruction of money and securities. This additional protection is effective if a loss occurs at a covered premises, a bank or savings institution, living quarters of the named insured, partner or employee and while the property is in transit between any of these locations. Coverage at employee living quarters applies only if that employee was given the covered property to use or hold on behalf of the named insured. The automatic amount of $10,000 applies when the covered property is either in the described premises or at a bank while the $5,000 applies when the covered property is anywhere else. Either or both limits can be increased by an entry on the Supplemental Schedule.

The following three types of loss are excluded:

·         Losses that result from errors or omissions in accounting or arithmetic

·         Losses that occur because the property was voluntarily given out in an exchange or purchase

·         Any loss of covered property that is contained within any money-operated device (such as a vending machine). This exclusion does not apply if the device has a continuous reading instrument that records all amounts that are deposited or stored in the device that is covered.

Occurrence is defined under this segment as any loss that involves a single act or a series of related acts by one or more individuals. The named insured is required to keep records of all money and securities to verify any loss.

2. Fire Extinguisher Systems Expense (07 13 change)

Up to $5,000 is available in any one occurrence to pay the cost of recharging or replacing fire extinguishing equipment and systems that are discharged. Coverage applies only if the discharge is within 100 feet of a described building or within 100 feet of the premises. The greater of the two distances is used to determine if coverage applies.

Note: No deductible applies to this supplemental coverage, and there is no coverage if the system is discharged during testing or installation.

3. Reward Payment

As an additional coverage, reward payments are available to assist in solving crimes that result in covered property losses. The coverage consists of two categories of rewards. In the first category, up to $5,000 is available for information that leads to the arrest and conviction of any party that commits a crime resulting in a covered loss to the property portion of the policy. The coverage limit is also subject to the actual cash value of the damaged property at the time of the loss or the amount it takes to repair or replace the property, or however the value of the property has been determined by policy conditions. In other words, the policy would not pay $4,000 for information related to a crime that caused a $1,500 loss.

The second category of reward payment applies to the return of stolen property and is also for a maximum of $5,000. The reward amounts shown are the most that are available for any one occurrence.

Who is eligible to collect the award? Only one person can receive the reward. The first person, as determined by law enforcement, who voluntarily provides information that leads to a conviction or leads to the stolen property will receive the reward. However, that person cannot be any of the following:

·         The named insured

·         Family members of the named insured

·         Employees

·         Family members of employees

·         Employees of law enforcement agencies

·         Employees of a business engaged in property protection

·         Any person having custody of the covered property at the time the theft was committed

·         Any person involved in the crime

The reward is not paid until there is a conviction or the property is returned.

4. Computer Fraud

If a fraudulent transfer of the insured’s property or money and securities occurs by using a computer, there is coverage for up to $25,000. The transfer must move property or money and securities from inside an insured premises or bank to a person or place outside the insured premises or bank. This limit can be increased on the Supplemental Schedule.

5. Money Orders and Counterfeit Money

If the named insured, in good faith, provides services or hands over money or merchandise to another party who pays with unrecoverable money orders or counterfeit money, coverage is provided for the loss to the named insured. The maximum payout is $5,000, but it can be increased on the Supplemental Schedule. There is a limitation that money orders are covered only if they were issued by a post office, express company, or bank. Counterfeit money is also restricted to only money accepted during the course of business.

6. Forgery or Alteration

Loss that occurs because of the forgery or alteration of checks, drafts, promissory notes, bills of exchange or any similar instruments is covered. Such instruments must be issued by the named insured, the named insured’s agent, or someone impersonating either of these parties. There is no coverage if the loss is for such instruments that are received by the named insured from other sources.

If the named insured realizes that an instrument has been forged or altered and refuses to honor it, this coverage also pays related and reasonable legal expenses that may ensue. The named insured is given written permission to go ahead with their own defense, and the named insured will be reimbursed for those expenses.

The $2,500 limit is the most that will be paid under this coverage for a single loss. The amount may be exhausted by the loss itself, the defense of a suit or a combination. The limit can be increased on the Supplemental Schedule.

7. Outdoor Signs

Direct damage to outdoor signs owned or under the control of the named insured is covered. This coverage supersedes any other coverage provided for signs elsewhere in the policy.

The any one-occurrence limit is $5,000. This limit can be increased in the declarations.

8. Employee Dishonesty

Coverage is provided for employee dishonesty that results in the loss of money, securities, or business personal property. The employee may be working alone in committing the dishonest act(s), or the employee may collude with other persons. However, if any of those other persons include the named insured, partner, member, or “manager” of the named insured, there is no coverage.

There is no coverage for any indirect loss attributable to the employee dishonesty, such as a business income loss, any costs to establish the existence or the amount of a loss or any legal liabilities. Legal expenses are not covered.

An Inventory computation and/or profit and loss statement cannot be the sole proof that a loss has occurred or be the sole method of establishing the value of the loss. In other words, there must be tangible evidence that a dishonest act occurred, and there must be a way to calculate the amount of that loss accurately.

A special exclusion applies to employees who have committed prior acts of dishonesty. If the named insured or any partner, member, manager, trustee, officer or director of the named insured discovers that an employee was previously involved in a dishonest act, there is no coverage for any acts of that party. It doesn’t matter whether the incident occurred before or after the insured hired the employee—coverage ceases. The termination takes effect the moment the party's prior act is discovered. There are no exceptions to this exclusion unless the insurer is willing to write a manuscript endorsement to document an exception. The $5,000 limit in the form may be increased on the Supplemental Schedule. This limit is the total amount available for a single occurrence. The limit of insurance is not cumulative from year to year, so the limit shown is the maximum that will be paid for any one occurrence of a dishonest act or event, regardless of how many years the policy has been in force or how much premium has been paid. The dishonest act or event must happen during the policy period to be covered.

The act or event that causes a loss must have not only occurred during the policy period but must also be discovered no later than one year from the end of the policy period. There is an important exception. If the insured suffers a loss that would have been eligible under a previous policy, but it was not discovered until after the one-year limitation expired, there may be coverage. However, the old loss would have to meet two criteria. First, this policy must be the replacement for the one in force when the loss actually occurred. Second, the loss would have to involve a loss that is eligible under this policy provision. In addition, any payment made is subject to the current policy term's insurance limit (unless the prior term's limit was lower).

Possible Exclusion Ambiguity

There is one more exclusion, and it may not be very clear. It states that loss or damage due to a dishonest act performed by the named insured and any partner, member, officer, manager, director, or trustee is ineligible for coverage. Up to this point, the exclusion is very similar to exclusions in the Commercial Crime Form. However, the exclusion also bars loss for dishonest or criminal acts by authorized representatives and by anyone to whom the named insured has entrusted property. This part of the exclusion may be problematic. Doesn’t the named insured entrust items to employees as part of their duties? Aren’t employees authorized representatives? This wording is NOT used in the Commercial Crime policy and could cause confusion after a loss. By the way, under the customer’s property portion of this coverage, dishonest acts by the named insured managers, directors, trustees, or authorized representatives are covered.

9. Ordinance or Law – Equipment Coverage (07 13 change)

This coverage was inspired by the dynamism surrounding environmental laws. Federal, state and community standards may require changes in equipment when it is replaced for any reason. If so, this coverage pays for the upgrade but only if the equipment’s valuation is on replacement cost and the item is being replaced due to a covered cause of loss.

If refrigeration equipment is damaged, this coverage pays three additional costs:

The ordinance coverage is paid only if the equipment is actually repaired or replaced. The total payment cannot exceed the limit of insurance on the declarations.

This coverage does not pay for costs related to pollutant enforcement. In addition, if the named insured had an order to comply with an ordinance or law prior to the loss and failed to comply, there will be no payment for that previously neglected upgrade under this Additional Coverage.

When the equipment is actually repaired or replaced, the payment is the lesser of:

·         Actual amount spent to repair or replace. The repair cost cannot exceed the cost to actually replace. This cost includes the cost to upgrade to the ordinance or law.

·         Limit on the Declarations for covered buildings or business personal property.

Coinsurance does not apply to this Additional Coverage.

10. Lock Replacement

If keys to locks on premises are stolen or lost, the insurance company will pay up to $5,000 to replace or repair the locks subject to a $100 per occurrence deductible.

Note: The keys can be to any locks as long as the locks are on premises.

11. Artificially Generated Electrical Current

This coverage is applicable only to computers. When artificially generated electrical current damages or destroys the named insured’s computers, the company will pay, but only if the:

Any loss payment is subject to the deductibles in the policy and the limit on the Declarations that applies to this (computer) equipment.

12. Guests’ Property

The named insured takes on a legal liability for property of guests when they are on the premises. This coverage provides a $25,000 per occurrence/$5,000 per guest limit for such property kept in a locker or other secure area within a building or structure on the premises and another limit of $25,000 per occurrence/ $5,000 per guest limit for such property kept on the premises. Remember, this is legal liability coverage only. Because it is liability coverage, there is also coverage for defense costs the named insured may incur, but only if the insurance company has given written consent for the suit to be defended. The defense costs are in addition to the other limits in the coverage part.

 

Example: Perry, a professional photographer, locked his favorite camera in his locker at the Fun and Sun Country Club. When he returned from his round of golf, he discovered that it was missing. He reported his loss to the Club. The loss, estimated at $1,900, is paid under this coverage.

 

Note: Thefts from unsecured areas, such as depicted in this photo, would be ineligible for coverage.

 

There is no coverage for:

A single occurrence may involve a series of related actions caused by one or more persons. It also can be a single event or series of events not caused by any person.

Bankruptcy of the named insured does not impact the coverage under this additional coverage. All coverage is for the benefit of the named insured, and any claim for damages under this additional coverage must be made by the named insured.

C. Coverage Extension Changes

1. Personal Effects and Property of Others

The coverage is changed to increase the limit to $5,000 per occurrence and also permits it to be increased on the Supplemental Schedule.

2. Valuable Papers and Records (Other than Electronic Data)

The valuable papers and records coverage extension is increased from $2,500 to $10,000 for on-premises loss or damage. It also adds coverage when the valuable papers and records are off premises but only for $5,000. These limits can be increased for an additional premium.

Coverage is expanded to include not only the cost to replace or restore the lost information but also any physical loss or damage to the valuable papers and records owned by or in the named insured’s care, custody or control. The coverage extends to the cost of blank material and the labor necessary to transcribe any available records.

The covered cause of loss is more restricted and must be due to a specified cause of loss as defined in the CP 10 30–Causes of Loss - Special Form or due to collapse. Property that is held as samples or that has been sold and is waiting to be delivered is not covered. Any property that is being stored off premises is also not covered.

Note: If higher limits are needed, consider using one of the following forms because of causes of loss and coverage designed just for this exposure.

Related Articles:

AAIS Valuable Papers and Records Coverage Form

ISO Valuable Papers and Records Coverage Form

3. Property Off-Premises

The Golf Courses Program enhances the property off-premises extension by adding protection for computers while being transported (in transit). The limit can be increased in the Supplemental Schedule.

4. Outdoor Property (07 13 changes)

The Golf Courses Program significantly broadens the Outdoor Property coverage in types of property and causes of loss available.

Coverage applies only if one or more of the following causes of loss cause the outdoor property to be damaged.

·         Fire

·         Lightning

·         Explosion

·         Riot or civil commotion

·         Aircraft

·         Windstorm

·         Hail

·         Smoke

·         Aircraft or vehicle

·         Vandalism

·         Sinkhole collapse

·         Volcanic action

·         Falling objects

·         Weight of snow, ice or sleet

Note: The CP 00 10 outdoor property coverage extension includes only the first six causes of loss in the above list.

Applicable limits are based on the type of outdoor property.

Note: The CP 00 10 outdoor property coverage extension provides only $1,000 coverage for all outdoor property in a single occurrence.

 

Example: A tornado ripped up over half of the trees at the Fun and Sun Golf course and tossed them onto a number of golfing greens. The cost to remove the trees is $25,000. This leaves only $25,000 to pay for the tree and shrubs that must be replaced.

 

 

Example: The fairways at Fun and Sun Golf Course are covered with trees and other debris the tornado deposited there. The fairways also must be resodded to repair the damage from the debris and the tornado touchdown. The debris removal will cost $15,000, leaving only $35,000 to repair the fairways.

 

 

Miscellaneous Green Property

 

The expense to remove property of others consisting of trees, shrubs, and plants debris is covered under this item. The property of others cannot belong to the owner of the building when the named insured is a tenant.

Note: No limit is mentioned with the expense to remove property of others item, although there is reference to the terms and conditions of the rest of the extension. There could be an ambiguity as to what limit, if any, applies.

5. Accounts Receivable

The limit of insurance for the business personal property may be extended to include direct physical loss or damage created by a Covered Cause of Loss to accounts receivable for:

·         The amounts the named insured is owed from customers but is unable to collect

·         Interest charges on loans the insured has had to obtain to offset collections while the insurer was settling the claims payment process

·         Any additional collection expenses that were made necessary by the loss or damage

·         Other reasonable expenses incurred to re-establish accounts receivable records

The amount available is $5,000 for on-premises loss or damage and up to $1,500 for off-premises loss.

Note: If higher limits are needed, consider using one of the following forms because the coverage is designed just for this exposure.

Related Articles:

AAIS Accounts Receivable Coverage

Accounts Receivable Coverage

II. Modification to CP 10 30–Causes of Loss-Special Form

Several exclusions and limitations found in the Causes of Loss—Special Form are modified for some of the additional coverages and coverage extensions. The modifications are as follows:

A. Ordinance or Law

In order to not confuse coverages, the Ordinance or Law exclusion in the Special Cause of Loss form applies to the entire policy except for the Ordinance or Law – Equipment Coverage Additional Coverage that was added earlier in this endorsement.

 B. Mechanical Breakdown

The mechanical breakdown exclusion does not apply to computers.

C. Dampness, Dryness, Changes in Temperature, Marring or Scratching

The only change in the dampness, dryness, changes in temperature, marring or scratching exclusion subparts is the dampness or dryness of the atmosphere portion.

An exception is added so that when an air conditioning system used with the computer is damaged by a covered cause of loss, the resulting damage to a computer because of any dampness or dryness is covered.

D. Additional Exclusions for Computer Coverage Only

1. The following exclusions apply to computer coverage. Loss or damage due to any of the following is excluded regardless of other concurrently or sequentially occurring causes of loss.

Note: The reason these extra exclusions are needed is that MS GC 01 includes coverage for mechanical breakdown of computers that is not provided by the CP 10 30.

a. Errors or Omission

There is no coverage for damage or loss due to human errors or omissions in processing, recording, or storing information on computers. (Resulting fire or explosion is covered if caused by a covered peril.)

b. Electrical Disturbance

There is no coverage for damage due to electronic or magnetic injury, disturbance, or erasure of electronic recordings unless it is a result of a direct loss or damage caused by lightning.

c. Computer-Related Losses

There is no coverage for any loss or damage that is caused by or results from the failure, malfunction, or inadequacy of any of the following (regardless of who owns the property) because they cannot correctly recognize, process, distinguish, interpret, or accept dates or times:

d. Computer Advice or Consultation

Any of the following provided by the named insured or for the named insured is not covered when used to determine, test, or rectify potential or actual problems described in exclusion c. above.

2. When Electrical Disturbance, Computer-related Losses and Computer Advice or Consultation excluded above result in a specified cause of loss or elevator collision, that resultant loss is covered. However, there is no payment to repair, replace, or modify any item listed in exclusion c. above.

The damage from an elevator collision must involve the elevator experiencing a mechanical breakdown.

E. Employee Dishonesty

Most of the exclusions in the Cause of Loss–Special Form do not apply to the Employee Dishonesty Coverage provided in this endorsement. The only applicable exclusions are Governmental Action, Nuclear Hazard, War and Military Action in addition to specific exclusions discussed in the Employee Dishonesty Additional Coverage in this endorsement.

Related Article: Basic, Broad and Special Causes Of Loss Forms Analysis

F. Outdoor Signs

Most of the exclusions in the Cause of Loss–Special Form do not apply to the Outdoor Sign Coverage provided in this endorsement. The only applicable exclusions are Governmental Action, Nuclear Hazard, War, Military Action, Wear and Tear, Rust and Mechanical Breakdown.

Related Article: Basic, Broad and Special Causes of Loss Forms Analysis, for a description of the exclusions.

G. Valuable Papers and Records and Accounts Receivable

The only exclusions in Paragraph B. that apply to Valuable Papers and Records and Accounts Receivable are:

·         Governmental action

·         Nuclear hazard

·         War and military action

·         Computer-related losses

·         Computer advice or consultation

·         Continuous or repeated seepage or leakage of water—14 days or more

·         Water, other liquids, powder or molten material that leak or flow from plumbing, heating, air conditioning or other equipment caused by or resulting from freezing

·         The concurrent causation exclusions that are part of B.3.

Note: This item is ambiguous because of the difference between the two coverages. Valuable Papers and Records coverage applies only for specified causes of loss and collapse, while accounts receivable coverage is subject to the CP 10 30 causes of loss. Combining the two coverages under this same modification would suggest that the two are covered for the same causes of loss when they are not.

 H. Accounts Receivables

As noted in G. above, most of the exclusions in the Cause of Loss Form do not apply to Accounts Receivable, but the following ones that are unique to Accounts Receivable are added:

I. Property in Transit

Property in transit is increased to $10,000. This limit can be increased in the Supplemental Schedule.

III. Changes to the Commercial General Liability Coverage Part

A. Who is An Insured

The wording from CG 20 02 and CG 20 08 is added here. Club members and golf mobile users are added as additional insureds.

 

Example: Mary and Mindy are driving a golf mobile they rented from the club pro at the Fun and Sun Country Club. They are having a great time until they hit a bump and pin Jerry against a tree. Jerry sues Mary for her actions. The Fun and Sun Country Club’s policies respond because Mary, as the user of a country club golfmobile, qualifies as an additional insured.

IV. Definitions

The following defined terms are added to the Commercial Package Policy via the Golf Courses Program endorsement:

Computer is a programmable electronic device used to work with data. While the definition does apply to peripheral equipment and to related air conditioning and fire suppression systems, it doesn’t apply to data or media.

Counterfeit money is a money imitation meant to deceive.

Defect, as defined here, is used only with the Merchandise Withdrawal coverage and includes defects, deficiencies, inadequacies, and dangerous conditions.

Dependent Property is property upon which the named insured depends in order to maintain normal operations. There are four types of dependent property. It can deliver services or products to the named insured or others (not utility related); it can be a customer that accepts services or products from the named insured, or it can manufacture products on behalf of the named insured (for that insured's customers). The last category may have no business relationship with the named insured, but its existence attracts customers to the named insured’s operation. The property must be located in the coverage territory.

Employee is expanded beyond the full-time employee of a business. There are seven different categories that qualify as employees:

a.     An actual person (not a corporation) who is paid by the named insured and is under the control of the named insured with respect to performing his or her duties. The person remains an employee for 30 days after termination, but only if termination is not related to dishonest actions.

b.    A person who is a substitute for an employee or is hired for short temporary work is considered an employee while under the control of the named insured except when caring for property off-premises.

c.     A person leased to the named insured that is not a person described in a. or b. above. There must be a contract and a labor-leasing firm involved.

d.    A consultant for the named insured but only if that consultant was formerly an employee, director, partner, member, trustee, or manager.

e.     A guest student or intern but only while acting as a student or providing services for the named insured. There is no coverage for loss of property off premises.

f.      Any employee of an entity that merged with the named insured or was acquired by it prior to the policy effective date.

g.    Managers, directors or trustees when acting as employees or while on a task-oriented board.

An employee does not include independent contractors or similar type individuals unless specifically described in the list above.

Forgery is one party signing another person’s name with the intent to deceive. It does not include an unauthorized signing by a person of his or her own name.

Golfmobile is a conveyance that is motorized. It must be designed to carry no more than four persons. Its purpose must be to be used on a golf course by individuals who are playing golf. It cannot be manufactured or modified in any way to exceed 25 mph while on level ground. This definition applies only to the Who is An Insured modification in this endorsement. (07 13 addition)

Note: The golfmobile must be designed in a certain way, but that does not mean that if it is used contrary to its design that there is no coverage.

 

Example: Maude and Jerry were having a great day at the golf course and did not want it to end. After they finished their 18 holes, they took the golfmobile they had rented from Melody Golf Course and drove the two blocks to a local drive-through restaurant and grabbed some food. Then they drove another mile to the drive-in theater, where they watched a movie and enjoyed their food. After the movie, they drove the golfmobile to their home. The next day they returned it to the golf course.

The golfmobile qualified as a golfmobile under this definition throughout Maude and Jerry’s wonderful adventure.

 

Manager is any director of a limited liability company.

Member is an owner of a limited liability company.

Money includes all currency, coins, and banknotes with a face value and in current circulation, plus money orders, travelers’ checks and similar items that are held for sale to the public.

Occurrence, as defined here, applies to only the Crime portions of this form, and the meaning varies by the type of coverage. Under Money and Securities coverage, it means all loss that involves one or more related acts by one or more persons. Under Money Order and Counterfeit Money, it means one or more related acts or events by one or more persons, but it also can be one or more related acts or events not involving any person. Under Forgery or Alteration coverage, it means all losses in which a particular person was involved, regardless of how many instruments were forged or altered. Under Employee Dishonesty, it means all losses that result from a single act or series of acts caused by one or more employees.

Securities are evidence of debt such as stock certificates, bonds, contracts, tokens, stamps, credit card evidence that can be used to collect from the credit card company and other items that represent money but are not money. Food stamps and lottery tickets are also considered securities.

ENDORSEMENTS

The forms and endorsements developed for the Market Segments series of programs carry the designation “MS.”

The following program specific endorsements are available to modify the coverage provided under this program. However, it is important to remember that all of the endorsements available under the Property and General Liability Coverage Parts are available under this division.

Related Articles:

Commercial Property Program Available Endorsements and Their Uses

Commercial General Liability Available Endorsements and Their Uses

MS GC 03–Golf Courses-Suspension/Reinstatement of Coverage

MS GC 02–Golf Courses-Equipment Breakdown Endorsement allows any insurance company representative to immediately suspend coverage for equipment that is considered unsafe. This endorsement is used to initiate any suspension. If the Suspension box is checked, the MS GC 02 coverage is suspended at the described property as of the effective date. A suspension is lifted by marking this form’s reinstatement box. Coverage then applies at the described property shown and the effective date of the reinstatement.

Note: The equipment’s coverage can be suspended without this endorsement, but the form MUST be used for any reinstatement.

MS GC 04–Golf Courses-Hired Auto and Non-Owned Auto Liability Insurance

This endorsement amends the General Liability Coverage Part to provide coverage on a basis similar to commercial auto coverage. Hired auto coverage applies to bodily injury and property damage that arises from the maintenance or use of a hired auto by the named insured or any employee of the named insured. Non-Owned Auto Liability applies to bodily injury or property damage that arises from any person using a non-owned auto in the course of the named insured’s business.

Note: Non-owned coverage is designed to protect the named insured, not the owner or driver of the vehicle.

MS GC 05–Golf Courses-Loss or Damage to Guests' Autos (Legal Liability Coverage)

This endorsement provides coverage on a legal liability basis for damage to autos (and their equipment) left with the named insured on the described premises. It pays only for damage that occurs on the covered premises when the named insured bears legal responsibility for the damage. The Covered Cause of loss is any loss or damage, provided the named insured is found legally liable. However, there is no coverage for incidents involving:

Since this is liability coverage the Supplementary Payments should apply. Rather than make reference back to the Supplementary payments in the CGL, the endorsement lists the payments the company will make in addition to the coverage available under the policy's limit of insurance, and it does include defense costs.

A per event limit on the supplemental schedule is the most paid at a particular premises regardless of the number of cars involved in the incident. The deductibles shown on the Supplemental Schedule apply to:

·         Loss or damage to customers’ vehicles from theft, vandalism or mischief

·         Loss or damage from collision

"Auto" is defined as a land motor vehicle, trailer, or semitrailer.

MS GC 06–Golf Courses-Loss or Damage to Guests' Autos (Direct Primary Coverage)

This endorsement provides primary coverage for damage to guests’ autos (including loss of use) under the Building and Personal Property Coverage without regard to fault or the availability of the guest’s own auto insurance to pay for the loss.

It offers protection against direct loss of or damage to guests’ autos and auto equipment in the care, custody, or control of the insured while on the insured’s premises. The Covered Cause of Loss is any cause of loss not excluded within this particular endorsement.

The exclusions are:

The limit on the Supplemental Schedule for Guests’ Auto is the most that is paid minus any applicable deductible.

The limit and deductibles are shown on the Supplemental Schedule.

Auto is defined as a land motor vehicle, trailer, or semitrailer.

MS GC 07–Golf Courses-Service Errors and Omissions Coverage

An annual per premises limit of $10,000 is provided for legal obligations of the named insured when a service that is promised is not provided. This can be a lack of facilities, goods, service, or a misdelivery. Intentional actions, bodily injury, property damage, personal and advertising injuries and discrimination are not covered.

MS GC 08–Golf Courses-Fine Arts Coverage

This endorsement provides $25,000 for fine arts that are owned by the named insured or by others but are in the care, custody or control of the named insured.

Fine arts are described but not limited.

Important: The valuation is actual cash value, not replacement cost or stated value. This limits the usefulness of this endorsement. Consider using a Fine Arts Floater instead.

Related Article: AAIS Fine Arts Coverage Forms

MS GC 09–Golf Courses-Restaurants and Refreshment Stands

This endorsement expands coverage to include many features found in the Restaurant Market Segment and is written as a mini-market segment form.

MS GC 10–Golf Courses-Pesticide or Herbicide Applicator - Limited Pollution Coverage (07 13 name change)

Coverage for pollution due to pesticide or herbicide application is provided by removing the pollution exclusion in the CG 00 01 or CG 00 02 and replacing it with this one. It is important to remember that this revised pollution exclusion applies only to pesticide and herbicide application on the premises and only while meeting all federal, state and local ordinances. The standard pollution exclusion remains in effect for all other pollutants.

MS GC 12–Golf Courses-Scheduled Mobile Equipment Property Coverage

This endorsement is designed to cover the equipment used to maintain the grass on the golf course. The equipment must be scheduled on this endorsement to be covered.

MS GC 13–Golf Courses-Hole-in-One Prize Indemnification Coverage

This endorsement does not protect against any type of injury or damage. Instead, it provides the money to pay for Hole-in-One offers the golf course advertises. The prize amount, the events dates, the length of the hole-in-one, and estimated number of event participants must be entered in the endorsement schedule.

MS GC 14–Golf Courses-Distilled Spirits and Wines Market Value

This special endorsement is added to risks having stocks of wines and distilled spirits. It recognizes that wines and distilled spirits usually appreciate in value over time compared to most property that depreciates as it ages. It should not be considered as a replacement but as an addition to the valuation clause of the policy or coverage form.

Related Article: CP 99 05–Distilled Spirits and Wines Market Value

UNDERWRITING CONSIDERATIONS

Any program offered by an individual insurer will have its own set of eligibility guidelines. If the program is a generic or standard program, as in the case of ISO’s Market Segments Programs, it normally has a set of qualifying criteria. Because there may be differences between the two sources of eligibility criteria, it is important for the insurance professional to be thoroughly familiar with the applicable new business and renewal qualifications. The following review of the underlying and eligible requirements for the Golf Courses Program is for the ISO generic program.

Specific Golf Course Operations

The types of activity at a golf course dictate the underwriting. A small course with only maintenance sheds will have very limited property exposure. However, the largest country clubs often have high property values in protection class 9 and 10 areas. On premises fire fighting preparations efforts are very important to these exposures. Restaurants are common and underwriting starts with the fire exposures that exist in the kitchen. The type of cooking determines the protection and cleaning methods necessary for an acceptable risk. Grease-laden vapor coats surfaces and adds to the risk that any fire will quickly spread. The more vapor that is produced, the higher the level of protection and more frequent cleaning is required. Filters, automatic protection systems, standard clearances and automatic fuel shut-offs should be the focus of any questions regarding kitchen safeguards.

General liability exposures in the restaurant and at refreshment stands revolve around slip and falls, spills and food poisoning exposures. Spills must be cleaned up quickly. Floors and counter surfaces must be kept free from defects, and food must be handled in a proper and safe manner.

Alcoholic beverage service is another area to focus on, particularly when the applicant is a club. This is true even if liquor liability coverage is not provided. Liquor use increases the likelihood of both liability and property losses. At a club, it may be difficult to decline drinks to a member, so alternative methods of drink restriction must be exercised. Greens protection and a history of past losses are vital in underwriting a club.

A major part of underwriting is identifying the specific exposures involved with each golf course or golf range risk. A questionnaire or survey is an important step that not only guides the underwriting effort but also helps to identify coverage gaps.

COVERAGE ISSUES

Commercial Property Coverages

Many of the issues related to the underwriting of commercial property insurance, such as construction, occupancy, physical characteristics, types of rates and so forth, are discussed in detail under the commercial property section.

Related Article: Commercial Property Program Underwriting Considerations

Commercial General Liability Coverages

Many of the issues related to the underwriting of commercial general liability insurance, such as claims-made versus occurrence coverage, limits, deductibles, endorsements, and so forth, are discussed in detail under the commercial general liability section.

Related Article: Commercial General Liability Policy Underwriting Considerations

Property Enhancements

Several property enhancements are added to the commercial property coverages via the Market Segment endorsement. Any increase in exposure presented by the individual risk hazards and covered by the endorsement enhancements should be identified. Once identified, these hazards and exposures should be evaluated to determine if they are contemplated by the program's coverages and rating structure. The exposures should be addressed if any additional coverages, endorsements, premiums, or other tailoring is necessary. The property enhancements with the most significant underwriting concerns are as follows:

Crime and Dishonesty Enhancements

The Golf Courses Program endorsements add coverage for computer fraud, money and securities, money orders and counterfeit money, forgery and alteration, and employee dishonesty.

The insured should be evaluated for crime protection devices, including the type of devices used and how they are maintained. The evaluation should include alarms, locks, lighting, fencing, guards, or other security measures.

Sound hiring procedures, background checks, and internal controls are necessary to minimize employee dishonesty losses. Procedures should be implemented and reviewed regularly to monitor and prevent the potential for crime and dishonesty losses.

Related Article: Crime Underwriting Considerations, for more information.

RATING CONSIDERATIONS

The rating for this product is the same as any other package product. All coverages must be rated according to the rules found in the ISO Commercial Lines Manual. The MS GC 01 has a number of enhancements, and pricing should be in place for any one that is selected. It is rated based on the number of employees and whether Earthquake and/or Flood are covered in the policy's other parts.