Q

I write an account on an ISO BOP coverage form, BP 00 02 12 99, with attached endorsement BP 04 56 01 97, utility services — direct damage. Electrical service was interrupted by a lightning strike, which resulted in direct damage to goods on the assembly line. This was covered by the utility services — direct damage endorsement.

However, there was further damage caused by a power surge through the lines when service was restored. Had the power not been interrupted, the surge wouldn't have occurred. Therefore, I believe this resulting damage also should be covered. What do you think?

California Subscriber

A

Given your explanation of the situation, the damage from the power surge would not be covered. Form BP 00 02 includes an exclusion, B. 2. a., which voids coverage for loss or damage caused by or resulting from artificially generated electrical current, including electric arcing, that disturbs electrical devices, appliances, or wires. The only exception to this exclusion is for damage caused by a resulting fire.

The utility services — direct damage endorsement does not address artificially generated electrical current, nor does it amend exclusion B.2.a. in any way. When endorsements do not change policy wording, the policy controls the coverage. Therefore, it is our opinion that the power surge damage would not be covered.