ISO form and endorsement changes approved by individual states, through February 1996

Rough Notes, Apr 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., 1996 (C)Copyright, ISO Commercial Risk Services, Inc., 1996.

COUNTRYWIDE

Correction to the Owners and Contractors Protective Liability Coverage Form

Effective immediately, the Owners and Contractors Protective Liability Coverage Form, CG 00 09, has been revised to correct a simple omission of the word "or" from Section I--Exclusion 2.c, that occurred during printing.

Listed below in the individual states will be an indication of those states that have approved this revision to the CGL Program. The text will not be repeated but will refer to this Countrywide section.

Homeowners loss settlement and valuation endorsements

In order to provide additional loss settlement and valuation options to homeowners policies, three new endorsements have been developed to be used with Homeowners Coverage Forms HO 00 02 and HO 00 03.

1. Actual Cash Value Loss Settlement (HO 04 81)--provides actual cash value for all covered property, including building.

2. Functional Replacement Cost Loss Settlement (HO 05 30)--provides settlement for cost to repair or replace with less costly common construction materials and methods which are the functional equivalent of the loss or damaged property.

3. Modified FRC Loss Settlement (HO 05 31)--for use in jurisdictions where state law prohibits loss settlement in an amount less than the ACV of the damaged property. This endorsement makes sure the settlement is not less than the ACV.

Listed below in the individual states, is an indication of those states that have approved these revisions to the homeowners program. The text will not be repeated but will refer to this Countrywide section.

1995 commercial general liability revisions

Revisions have been made to the Commercial General Liability Coverage Forms, both the Occurrence Version, CG 00 01, and the Claims-Made Version, CG 00 02, as well as many of the CGL endorsements. Most of the changes and revisions made are to provide consistency in policy language, forms, format, concepts, and wording. Many of these revisions are editorial in nature, such as alphabetizing the definitions, making sure defined terms and only defined terms are in quotation marks, and similar type corrections.

One consistent change made is in the definition of insured contract, whereby the list of professional services has been amended to better explain and clarify by using standard industry terms. A significant clarification has been made in the insuring agreements of the coverage forms and endorsements. This revision makes clearer the intent of the insurer to not provide defense when no coverage exists within the policy.

Contractual liability coverage within the CGL is clarified to extend to not only the damages assumed by the insured in an insured contract, but also, defense of such. An interesting personal injury revision has been made. Attempts have been made to use the personal injury coverage for wrongful entry or other invasion of the right of private occupancy, to reflect pollution coverage. It has now been clarified that personal injury does not cover pollution.

The amount of loss of earnings coverage provided an insured who loses income at the request of the insurer under the supplementary payments coverage has been increased from $100 per day to $250.

The definition of Who Is An Insured has been extended to include limited liability companies.

Two important definitions have been clarified and bear close attention, the first being "Products and Competed Operations Hazard" and the second being "suit."

The above outlined changes and revisions are brief overviews and not all inclusive in nature. Detailed analysis of all the revisions and the full impact of those changes should be made. Listed below in the individual states, will be an indication of those states that have approved these revisions to the CGL Program. The text will not be repeated but will refer to this Countrywide section.

Commercial property manual rules and SCOPES revisions

Commercial property changes were made to rules, loss costs, forms, and SCOPES filings including: an increase in the base property damage deductible for buildings, personal property, spoilage, and builders risk from $250 to $500, with a $250 buy-back available. Optional deductibles now start at $1,000 instead of $500. Condo Commercial Unit-Owners Optional Coverage Form CP 04 18 is revised: changes in rates were filed to coincide with the increase in the base deductible from $250 to $500. Provisions were made for additional loss assessment coverage subject to a separate schedule and limit, but no more than $1,000 for an assessment due to the condominium association's policy deductible. The form has also been revised to allow for the insertion of a deductible for loss assessment.