ISO form and endorsement changes approved by individual states through December 1995

Rough Notes, Jan 1996 by Kowatch, Diana

The PF&M Companion is a service of the Policy Form and Manual Analysis Service, published by the Rough Notes Company, Inc. Policy Form and Manual Analysis (PF&M), continually updated since 1929, is the personal, commercial, and specialty policy and form analysis service provided by the Rough Notes Company. PF&M is available in paper, on disk in Three Part Harmony, and on CD-ROM through Silver Plume as Rough Notes. For more information on this service call 1-800-428-4384.

Includes copyrighted material of Insurance Services Office, Inc. or ISO Commercial Risk Services, Inc., with its permission; (C)Copyright, Insurance Services Office, Inc., 1995 (C)Copyright, ISO Commercial Risk Services, Inc., 1995.

COUNTRYWIDE

Numerous changes have been made to the CLM Classification Table. Revisions include new classes, reinstating former rate group and class limits, defining to whom classes apply, and what endorsements are available for use with classes. Footnotes are added, deleted or updated accordingly. The changes made are too comprehensive for this brief analysis and a thorough review of all changes and material provided by ISO is recommended.

Listed below in the individual states will be those that have approved the 1995 CLM Classification Table revisions. The text will refer to this Countrywide section. This revision applies to all policies written on or after March 1, 1996 or using a March 1996 distribution date (where appropriate), unless otherwise shown.

Commercial property revisions

Numerous changes have been made to the business income coverage forms. The most important is the implementation of a 72-hour waiting period or deductible. Another is how the amount of loss is determined. Wording has been added to clarify that only the loss of income that would have been realized had no loss occurred, will be provided. In other words, an attempt is made to clarify that the coverage form will not consider windfall profit others are experiencing as a result of the loss, to be covered. The period of restoration, with respect to business income has been defined. Numerous other changes are made to the time element coverage forms and endorsements.

Builders risk changes clarify that permanently installed equipment to service a building, is now covered. The limit for building materials has been increased from $2,500 to $5,000, as has property in transit. Changes have been made to Waiver of Rights of Recovery Against Others. Clarifications have been made to builders risk as to when coverage ends: Coverage ceases as soon as the building is occupied in whole or in part, for its intended use. A new endorsement is available for theft of building materials.

Significant exclusions have been added to the cause of loss forms. Of key importance is the clarification that if earthquake occurs and subsequent fire ensues, only the fire damage is covered. Losses experienced as a result of off premises services such as utilities, have been clarified. Only direct loss within the building is covered. Read the exclusion carefully for its full impact. Satellite dishes are added to the list of antenna and towers excluded. Additional damage caused by insects, birds, and animals are excluded but the exclusion must be very carefully read. Dishonest acts of leased employees are also excluded.

Several coverage extensions have been upgraded, such as the lengthening of the preservation of property provision to 30 days instead of 10, when property has been removed from the premises after a loss to preserve. Other extensions such as valuable papers, newly acquired property, property off-premises, outdoor property, and debris removal have been increased.

Coverage clarifications include one for falling glass. When glass is covered, coverage applies to the glass itself, but also any property the falling glass may damage. Additional collapse coverages have been defined and added.

Extensive changes have been made to definitions, exclusions, and applications of vacancy and unoccupancy. Overall, the property changes are significant. Careful evaluation and review are needed to realize the full extent of the new revisions. This discussion provides only a sketch of the most significant.

Listed below in the states sections will be those that have approved the new property program. The text will refer to this Countrywide section. The date the revision has been approved for use is January 1, 1996, unless otherwise shown below.

Underground storage tank liability policy

The claims-made liability policy for USTs, developed to respond to EPA finalization of regulations on financial responsibility, has been approved in additional states. Covered is any UST incident over the deductible, for sums for damages and corrective action costs, subject to the amount of the actual damages/corrective action costs or the UST incident limit, whichever is least. Program forms include: CG 00 42--Underground Storage Tank Policy; CG 30 57--Supplemental Extended Reporting Period Endorsement; CG 24 01--Non-Binding Arbitration Endorsement; and CG 24 02--Binding Arbitration Endorsement.