CANNABIS BUSINESSOWNERS POLICY AVAILABLE ENDORSEMENTS AND THEIR USES

(December 2024)

0603 Endorsements

INTRODUCTION

This list identifies endorsements available to modify the American Association of Insurance Services (AAIS) Cannabis Businessowners Policy. It is arranged by form number and title and briefly describes and explains how each endorsement is used. It does not include any state specific endorsements, changes, or amendments.

FORM NUMBERING

The ten-digit numbering sequence of AAIS forms and endorsements has a very specific meaning:

AAIS CANNABIS BUSINESSOWNERS AND BUSINESSOWNERS POLICY ENDORSEMENTS

A combination of BP and CB endorsements are filed for use with this program.

BP 0309–Coverage Limitation–Designated Premises or Project

This endorsement restricts coverage. It limits the liability coverage the Businessowners Policy provides to only the premises or project on the endorsement schedule.

BP 0323–Seasonal Increase

This endorsement is used to increase business personal property limits for the time periods on the endorsement schedule.

Note: It is very important to consider the seasonal increase that the Businessowners Policy provides automatically under How Much We Pay when selecting the appropriate limit for this endorsement.

Related Article:Peak Season Coverage

BP 0325–Sprinkler Leakage Earthquake Extension

This endorsement is used when sprinkler leakage that an earthquake causes is the only earthquake coverage desired.

BP 0336–Premium Payments

The endorsement is used when the insurance company issues a policy with a term of more than one year. It notifies the named insured that the company will recalculate the premium on each anniversary date. The company will also add any new and revised policy forms and endorsements at the same time.

BP 0346–Change Endorsement

This endorsement is used to make miscellaneous changes to the policy that other endorsements cannot do. These changes should not involve coverage or premium considerations.

BP 0355–Windstorm or Hail Percentage Deductibles

This endorsement provides a percentage deductible approach to windstorm or hail loss or damage to covered property at locations on the endorsement schedule. The rules specify that the percentage options available are 1%, 2%, or 5%. The minimum deductible is $1,000 per occurrence.

Related Article: Windstorm or Hail–A Discussion

BP 0662–Utility Services Disruption–Time Element

This endorsement was previously named Utility Interruption–Time Element. It covers loss of earnings and extra expenses incurred because of a disruption of covered listed utility service or services to locations on the endorsement schedule. A covered peril must cause the disruption.

Related Article: Utility Services Coverage

BP 0676–Exclusion–Fungus or Related Perils

This endorsement excludes liability coverage for losses that result from direct or indirect contact with fungus or related perils. It has exceptions for specific food-producing risks, farm workers and for losses due to slippery surfaces because a fungus or related peril exists or is present.

BP 0677–Exclusion–Fungus or Related Perils–Contracting Operations

This endorsement excludes liability coverage for injury or damage due to contact with fungus or related perils when coverage is written on contracting operations. It does not have any exceptions.

BP 0679–Limited Coverage for Loss by Wet Rot, Dry Rot, Bacteria, Fungi, or Protists

This endorsement can be used in place of BP 0676–Exclusion–Fungus or Related Perils. It provides limited coverage for damages the named insured must pay for bodily injury or property damage that results from any contact with fungus or related perils. It has exceptions for specific food-producing risks and farm workers. An occurrence limit and an aggregate limit must be entered on the endorsement schedule.

BP 0711–Loss Payable Options

This endorsement applies to property coverage. It establishes the rights, requirements, and conditions for loss payments to loss payees, lenders' loss payees, and parties to a contract of sale.

BP 0713–Builders' Risk–Completed Value

This endorsement covers buildings under construction listed on the endorsement schedule. The limit of insurance entered should be 100% of the building's projected completed value. This coverage is similar to the coverage that Builders’ Risk Coverage Forms provide.

Related Articles:

CP 00 20–Builders’ Risk Coverage Form Analysis

AAIS Builders' Risk Coverage Forms

ISO Builders’ Risk Coverage Form

BP 0720–Liability Exclusion (Applying to all Hazards in Connection with Designated Premises, Operations, or Products)

This endorsement excludes all liability for bodily injury, property damage, and personal and advertising injury arising out of the ownership, maintenance, or use of the designated premises or operations on the endorsement schedule.

Note: This endorsement should be used only when those operations or premises are insured elsewhere because this endorsement and others like it are frequently challenged when a major incident occurs.

BP 0725–Contractual Liability Limitation

This endorsement limits contractual liability coverage to only the five covered contracts or agreements listed on the endorsement. It eliminates the Businessowners Policy’s broad definition of covered contracts.

BP 0729–Coverage E–Employee Benefits Liability Coverage–Supplemental Extended Reporting Period

This endorsement establishes the provisions for the Supplemental Extended Reporting Endorsement for Employee Benefits Liability coverage. It is used when the named insured decides to purchase the extended reporting period detailed in BP 0728–Coverage E–Employee Benefits Liability Coverage–Claims-Made Basis. This is an unlimited time extension and provides an additional limit of insurance for claims made during the reporting period.

BP 0731–Waiver of Subrogation

This endorsement applies to only the products/completed work hazard. It waives the insurance company’s rights of recovery against the party(ies) or organization(s) on the endorsement schedule. The waiver applies to such injury or damage that arises out of the named insured's ongoing work or work it does under contract for that party or organization.

BP 0739–Deletion–Coverage M–Medical Payments–Designated Classification or Premises

This endorsement deletes Coverage M–Medical Payments for the scheduled classification or premises location on the endorsement schedule. It provides first aid supplementary coverage as a substitute.

BP 0747–Aggregate Limits of Insurance per Location

This endorsement changes the General Aggregate Limit to apply separately to each location the named insured owns or rents as the endorsement defines location.

BP 0750–Certified Terrorism Loss (01 15 change)

Related Article: Terrorism–American Association of Insurance Services (AAIS) Forms

BP 0770–Certified Act of Terrorism Exclusion (With Limited Exception)

Related Article: Terrorism–American Association of Insurance Services (AAIS) Forms

BP 0797–Exclusion – Data Breach Liability - Personal and Advertising Injury

This endorsement can be used in place of mandatory BP 0798. It excludes only personal and advertising injury loss due to data breach liability, which means that bodily injury and property damage losses are covered. An additional premium is required when this endorsement is used.

BP 0838–Silica Exclusion

This endorsement defines silica and excludes all liability exposures of silica and silica-related dust.

BP 0839–Asbestos Exclusion

This endorsement excludes coverage for liability exposures associated with asbestos and asbestos-related products.

BP 0848–Additional Insured – Building Owner

This is a property endorsement that can be used to designate the building owner scheduled on the endorsement as an additional insured. It requires that any property loss be adjusted with both the named insured and the building owner.

BP 0858–Exclusion–Communicable Disease

This endorsement excludes direct or indirect bodily injury, property damage, or personal and advertising injury due to the alleged or actual transmission of communicable diseases by people, an insured's property and products, or property of others in its care, custody, or control. It also excludes loss, cost, or expenses due to any requirement that results from communicable diseases or conditions attributed to those diseases.

BP 0859–Exclusion–Communicable Disease–Limited Products Exception

This endorsement is identical to BP 0858–Exclusion–Communicable Disease except that it does not apply to the alleged or actual transmission of a communicable disease by any product intended for consumption by, or to be topically applied to, animals or humans.

BP 0868–Cross Liability Exclusion–Injury to Certain Insureds

This is a liability endorsement. It is used to exclude bodily injury and personal and advertising injury to the insureds that receive their status as insureds based on the type of business listed on the declarations.

Note: This means there is no coverage if a partner sues another partner or if a stockholder sues an executive officer.

ENDORSEMENTS TO BE USED ONLY WITH AAIS CANNABIS BUSINESSOWNERS

Note: Many of these endorsements are similar to those used with the BP 0100 and 0200. When not specifically noted the changes are due to differences in policy construction rather than coverage differences. Examples are that the paragraph numbering used, references made to BP 0100 or BP 0200 within the endorsement and similar items.

CB 1701–Deletion – Cannabis Activity Tracking System

Under Property Not Covered Item 4.a., cannabis that this not traceable under a cannabis activity tracking is not covered. This endorsement removes that restriction, but other significant restrictions on cannabis remain.

CB 1702–Outdoor Signs Coverage

The outdoor signs described on the endorsement schedule are covered up to their listed limit. This is similar to the Optional Outdoor Sign Coverage available under the standard AAIS BOP.

CB 1704–Crime Coverage – Loss Sustained Coverage

Employee Dishonesty Coverage, Counterfeit Money or Money Orders Coverage, Forgery Coverage and Money and Securities Coverage can be provided when this endorsement is attached. CB 1705–Crime Schedule – Specific Limits must be attached when the endorsement is used to schedule the coverages, limits, and locations that apply. If coverage is not written on a blanket basis, CB 1706–Crime Schedule – Covered Locations must also be attached.

CB 1705–Crime Schedule – Specific Limits

This schedule shows the selected coverages and limits applicable to the crime coverages described in CB 1704–Crime Coverage – Loss Sustained Coverage.

CG 1706–Crime Schedule – Covered Locations

When CB 1705 states that crime coverage is on a schedule location basis, this endorsement must be attached.

CB 1709–Contaminated Food Coverage

When a food contamination incident happens, immediate action is required. This endorsement pays the costs of the clean-up and the testing and vaccinating of employees. It also pays for the lost earnings, starting 24 hours after the event, and the cost of the food that must be destroyed. Once the named insured is ready to return to operations, an advertising campaign may be needed to encourage customers to return, so this coverage also pays for the costs of such a campaign. There is no coverage for contamination of cannabis that violates local or state laws, rules, ordinances or regulations.

CB 1710–Spoilage Coverage

This endorsement covers loss or damage to perishable stock or merchandise caused by the perils of breakdown and contamination and/ or power disruption for the limit(s), perils, and deductible(s) on the endorsement schedule.

CB 1711–Earthquake and Volcanic Eruption Coverage

This endorsement insures loss or damage to covered property that earthquake and volcanic eruption causes. This is not the same as the earth movement exclusion. This endorsement removes only the earthquake and volcanic eruption portion of that exclusion. Coverage applies to all covered locations because the endorsement does not have a schedule.

CB 1712–Water Backup and Overflow Coverage

This endorsement buys back the part of the water exclusion that excludes overflow and backup of sewer, drains, sump pumps, and similar equipment. It can be used for direct damage and/or loss of income. Coverage applies at locations and for the type of property, coverage(s), and limits on the endorsement schedule.

CB 1713–Data Compromise Expense Coverage

This endorsement is a buyback for some of the computer data coverage the Businessowners Policy excludes. It provides three types of coverage in a prescribed manner for the benefit of employees, clients, and other designated insureds whose personal information was compromised.

CB 1714–Utility Service Disruption–Property Damage

This endorsement was previously named Utility Interruption–Property Damage. It covers loss or damage to covered property that occurs because a covered specific utility service or services to locations on the endorsement schedule is disrupted. A covered peril must cause the disruption of utility service.

Related Article: Utility Services Coverage

CB 1801–Protective Devices

This endorsement is a warranty that the protective devices on the endorsement schedule will always be in proper working condition. A credit is provided for such devices. If they are not working at the time when an otherwise covered fire or theft loss occurs, there is no coverage for that loss.

CB 1802–Windstorm or Hail Exclusion

This endorsement excludes loss due to windstorm or hail in their entirety. The only exception is when the windstorm or hail results in a covered peril. The damage from that covered peril would be covered but not the hail or windstorm damage.

CB 1803–Cosmetic Damage Exclusion – Roofing Materials

This exclusion applies only for damage to roof materials caused by windstorm or hail. All coverage for damage that is considered only cosmetic is excluded. Such damage is covered only if the property is unable to stop the entrance of rain, hail, or other elements.

CB 1804–Theft Exclusion

This endorsement excludes loss caused by theft of business personal property. Ensuing losses that a specified peril causes are covered. However, it does not exclude pillaging or looting that takes place when the civil commotion or riot takes place.

CB 2001–Coverage E–Employee Benefits Liability Coverage–Claims-Made Basis

This endorsement covers damages due to injuries to employees caused by the named insured’s negligent act, error, or omission committed in administering an employee benefit program.

Related Article: BP 0728–Coverage E–Employee Benefits Liability Coverage–Claims-Made Basis

CB 2003–Employment Practices Liability–Claims-Made Basis

This endorsement adds Coverage F–Employment Practices Liability. It has its own coverage description, definitions, exclusions, and other conditions.

Related Article: BP 0623–Employment Practices Liability–Claims-Made Basis

CB 2004–Employment Practices Liability–Extended Reporting Period

This endorsement is used when the named insured purchases the three-year extended reporting period specified in BP 0623–Employment Practices Liability–Claims-Made Basis. It provides an additional limit of insurance for claims made during the reporting period.

CB 2006–Expanded Coverage for Property Damage to Rented Premises

This endorsement broadens coverage for property damage for which the named insured is legally liable to apply to the premises on the endorsement schedule. It applies only if it rents the premises from the owner or occupies the premises with the owner's permission. It eliminates the more limited Coverage O–Fire Legal Liability and short-term rented premises coverages. It eliminates most property damage exclusions for the scheduled premises. As a result, it provides almost first-party type coverage for the property, except that it covers only damages for which the named insured is legally liable. The limit per occurrence on the endorsement schedule is subject to the policy aggregate limit.

CB 2007–Non-Owned Auto Liability Coverage/Hired Auto Liability Coverage

This endorsement extends the Businessowners Policy's bodily injury and property damage liability coverages under Coverage L to apply to non-owned and/or hired auto situations listed on the endorsement schedule. Specific exclusions that are related to cannabis apply.

CB 2008–Expanded Non-Owned Auto Liability Coverage/Hired Auto Liability Coverage

This endorsement is identical to BP 0333–Non-Owned Auto Liability Coverage/Hired Auto Liability Coverage with two changes:

Specific exclusions that are related to cannabis apply.

CB 2009–Exception – Cannabis Inhalation or Exposure Liability

An exception is added to Additional Liability Exclusion 5. Cannabis Inhalation and Exposure Liability. The exclusion does not apply if the reason for cannabis being inhaled or persons being exposed to it was because of property damage. However, the property damage must be covered in the Property Coverages portion of this BOP.

Example: A fire at Mary Jane Dispensary produces a significant amount of smoke. Patty, a young girl, inhales a substantial amount of the smoke and must be hospitalized. Patty’s mother sues Mary Jane for Patty’s injuries, and Mary Jane’s BOP responds because this endorsement is attached.

CB 2101–Deletion–Coverage P–Personal and Advertising Injury Liability

This endorsement deletes Coverage P–Personal and Advertising Injury.

CB 2102–Exclusion–Abuse or Molestation

This endorsement excludes bodily injury, property damage, or personal and advertising injury due to the actual or threatened abuse or molestation of anyone who is in an insured's care, custody, or control. There is also no coverage when allegations are made that the named insured improperly managed the person who allegedly committed the abuse or how it responded to such actions or allegations.

CB 2103–Exclusion – Nuclear Energy Liability

The wording of this exclusion is similar to that used within the BP 0200.

CB 2104–Pollution Exclusion–With Exception for a Short-Term Pollution Event

This endorsement amends the pollution exclusion to cover short-term pollution events that begin at an identified place during the policy period and completely end at a precise time not more than 48 hours later. As a condition of coverage, the named insured must inform the insurance company of the event as soon as possible but not more than 14 days after it ends.

CB 2105–Pollution Exclusion–With Exception for Designated Pollutants

This endorsement amends the pollution exclusion by adding an exception. Coverage applies to injury or damage that arises from the use of the pollutants listed on the endorsement schedule. However, coverage applies only if the named insured uses the pollutants as part of its operations. Coverage does not apply to the same pollutants when they are transported, handled, stored, treated, disposed of, processed as waste, or transported or stored for others.

CB 2106–Total Pollution Exclusion

This endorsement removes all exceptions in the pollution exclusion.

CB 2107–Total Pollution Exclusion–With Exceptions for Building Equipment and Hostile Fire

This endorsement was previously named Total Pollution Exclusion–With Exceptions for Heating Equipment and Hostile Fire. It is identical to BP 0748–Total Pollution Exclusion except that it does not apply to bodily injury or property damage that arises from heat, smoke, or fumes from a hostile fire or fumes or vapor from heating, cooling, or dehumidifying equipment, or equipment to heat water.

CB 2108–Limited Pollution Liability Extension

This endorsement amends the pollution exclusion to provide coverage at premises or jobsites, except with respect to underground tanks. The coverage provided is subject to the 12-month aggregate limit on the endorsement schedule.

CB 6001–Leased Premises Limitation

This endorsement changes the definition of a covered contract with respect to leases of premises to include only the lease for the premises on the endorsement schedule and its adjoining ways.

CB 6002–Employee Redefined

This endorsement redefines employee. It removes leased workers as employees but only with respect to exclusion k., Workers Compensation, under bodily injury and property damage liability. This means this exclusion does not apply to the leased employee, so if a leased worker is injured while he or she performs duties for the named insured and sues the named insured, coverage may apply, provided no other exclusion would apply.

All other uses of the term employee, as used elsewhere in the policy, continue to include leased workers as employees. This could be useful when the contract between the named insured, and its leased employee provider requires that the provider cover workers compensation benefits.

CB 6003–Deletion–Volunteer Workers

This endorsement deletes all references to volunteer workers as insureds in the Businessowners Policy’s liability coverages.

CB 6004–Amendment of the Definition of Covered Contract

This endorsement amends the definition of covered contract to delete coverage for an additional insured's sole negligence. Coverage applies only if the named insured or another party that acts for the named insured causes the bodily injury or property damage.

CB 6101–Additional Insured–Vendors

This endorsement adds the vendor on the endorsement schedule as an additional insured but for only for the liability that arises from the products listed on the endorsement schedule. The products must be considered the named insured’s products and the vendor must handle, sell, or distribute the products. A change is made to the Cannabis Use, Inhalation or Exposure exclusion so that it applies when a designated vendor has care, custody or control of cannabis.

CB 6102–Newly Acquired Organizations

This endorsement was previously Additional Insured–Newly Acquired Organizations. It adds the named insured's newly acquired or formed organizations as named insureds, but only if the named insured that acquires it has a majority interest in them. It does not apply to joint ventures, partnerships, or limited liability companies.

CB 6103–Additional Insured–Owner or Lessor of Leased Land

This endorsement adds the scheduled party from whom the named insured leases land as an additional insured. However, coverage applies to only the lessor’s liability arising out of the named insured's use of the land described on the endorsement schedule.

CB 6104–Additional Insured–Grantor of Franchise

This is liability only endorsement covers a franchiser as an additional insured but only for liability that arises because the franchisor granted a franchise to the named insured.

CB 6105–Additional Insured–Co-Owner of the Insured Premises

This endorsement includes the co-owner on the endorsement schedule as an additional insured but only with respect to its liability as a co-owner of the premises on the endorsement schedule.

CB 6106–Additional Insured–Controlling Interest

This endorsement adds the party to the endorsement schedule as an insured. Coverage applies only to its liability due to its control, maintenance, or ownership of the scheduled premises that the named insured leases or occupies or its financial control of the named insured.

CB 6107–Additional Insured–Mortgagee, Assignee, or Receiver

This endorsement adds the party on the endorsement schedule as an insured but only for its liability because of its interest in the listed premises as a mortgagee, assignee, or receiver.

CB 6108–Additional Insured–State or Political Subdivisions–Premises Permits

This endorsement adds the state or political subdivision on the endorsement schedule as an additional insured. This is only with respect to premises that the named insured owns, controls or has rented to it for which the agency or subdivision issued a permit. It applies only to the hazards described.

CB 6109–Additional Insured–Designated Person or Organization

This endorsement adds the person or organization named in the schedule as an additional insured. Coverage applies only if the named insured’s acts or omissions that relate to its premises or ongoing work in any way caused the injury or damage. Actions or omissions by a party that acts on the named insured’s behalf that relates to the named insured’s premises, ongoing work, or other designated interests are also covered.

CB 6110–Additional Insured–Lessor of Leased Equipment

This endorsement is used to provide liability coverage for the organization or person that leases equipment to the named insured. Coverage applies only for injury or damage that the named insured causes by maintaining, operating, or using the leased equipment in any way.

CB 6111–Additional Insured–Engineers, Architects, or Surveyors

This endorsement adds any engineer, architect, or surveyor the named insured engages as an insured. Coverage applies only if the named insured’s acts or omissions that relate to its premises or ongoing work in any way caused the injury or damage. Actions or omissions by a party that acts on the named insured’s behalf that relates to the named insured’s premises, ongoing work, or other designated interests are also covered. Professional services are not covered.

CB 6112–Additional Insured–Lessor of Premises

The endorsement adds the entity on the endorsement schedule as an additional insured but only as the lessor of the premises listed on the endorsement schedule that the named insured leases. Coverage applies to only the named insured’s liability for damages because of injury or damage that its acts or omissions cause. This also includes acts or omissions of others who work on the named insured’s behalf for the part of the premises the party leases to the named insured.