Form and endorsement changes: Approved by individual states, through March 2003

Rough Notes, May 2003 by Hicks, Bruce

PF&M COMPANION

Approved by individual states, through March 2003

COUNTRYWIDE

Businessowners II

Insurance Services Office has introduced a multi-state, mandatory endorsement. The BP 05 14 01 03, War Liability Exclusion was written in order to expand the previous policy language. Unlike the property provisions, the BOP liability language only narrowly excluded damage related to war and similar events, barring coverage only when such liability was related to medical payments or exposure that was assumed contractually. The new War Liability Exclusion endorsement specifically prohibits coverage for any war (or similar activity) exposure.

Commercial Liability Umbrella, General Liability I

Insurance Services Office has introduced several multistate, mandatory endorsements. The following forms were written in order to expand the previous policy language:

* CG 00 62 12 02 War Liability Exclusion (CGL Coverage Part)

* CG 00 63 12 02 War Liability Exclusion (Products/Completed Operations and OCP)

* CG 00 64 12 02 War Liability Exclusion (Liquor Liability, Pollution Liability, Railroad Protective, UST Coverage Parts)

* CU 00 62 12 02 War Liability Exclusion (Commercial Liability Umbrella Coverage Part)

Unlike the property provisions, the liability language only narrowly excluded damage related to war and similar events, barring coverage only when such liability was related to medical payments or exposure that was assumed contractually The new War Liability Exclusion endorsements specifically prohibit coverage for any war (or similar activity) exposure.

Farm

Insurance Services Office has introduced several multistate revisions of its Farm Program, affecting basic coverage parts and endorsements. ISO advises that the changes (broader and narrower elements) offset each other so that, in its opinion, there is no overall rate impact. For complete information, please refer to ISO Circular LI-FR-- 2002-147. The changes are substantial. Highlights of the revision include the following:

Section I Changes:

Broader coverage impact-relating to outdoor antennas and satellite dishes, the property loss valuation provision, appurtenant structures, household property, personal property with special sub-limits, property away from an insured location, grave markers, borrowed or rented farm machinery, miscellaneous and newly acquired equipment, private utility poles, and much more.

Narrower coverage impact-relating to vehicle parts, credit cards, funds access cards, livestock (under Coverage F), frozen plumbing, towing-related loss, roadbed collision, and much more.

Clarification of-several causes of loss (such as earth movement, intentional loss and others) and defined terms (notably, "collapse"). While often described as an editorial change, there is always the possibility that interpretations will result in a measurable impact on coverage.

Section II Changes:

Broader coverage impact-relating to building property replacement cost provision, increased limit options on household and business property, blanket coverage for barns and other structures, loss due to interrupted operations, medical payments, and much more.

Narrower coverage impact-relating to functional building valuation option, theft of certain property classes, intentional loss, custom farming coverage, home daycare exposure, and much more.

Clarification of-various elements and items such as the Windstorm and Hail Percentage Deduction, protective safeguards, value reporting forms, chemical drifts, extensive changes to the Personal Liability Endorsement, Limited Farm Pollution Liability Endorsement, Premises Liability, crop dusting exposure, employers liability, and much more.

Section III Changes:

The changes in the section focus upon the coverage provided by the Farm Umbrella Liability Policy and Farm Umbrella Endorsements.

New and Revised Forms include:

FB 04 01, Farm Premises And Personal Umbrella Liability

FB 04 02, Broadened BI Definition

FB 10 03, Advertising Injury Exclusion

FB 10 04, Custom Farming Exclusion

FB 10 07, Products and Completed Operations

Revisions to the following policy provisions:

Coverage H Insuring Agreement and exclusions

Coverage I Personal and Advertising Injury

Conditions and Definitions

Editor's note: The list of individual states and which changes each has approved appears exclusively at the "PF&M Companion" link at the Rough Notes Web site: www.roughnotes.com.

By Bruce Hicks, CLU, CPCU