Summary: Both the Condominium Association Coverage Form (CP 00 17 10 12) and the Condominium Commercial Unit-Owners Coverage Form (CP 00 18 10 12) closely follow the Building and Personal Property Coverage Form CP 00 10 10 12 discussed elsewhere (see Building and Personal Property Coverage Form). The CP 00 17 is identical in most respects to form CP 00 10, except in those places where special language is needed to adapt the coverage to the special needs of a condominium association or commercial unit owner.
The differences between the CP 00 17 and the building and personal property form are the subject of this discussion. Differences between the current and previous form are noted.
Topics covered:
Introduction Building description Personal property description Property not covered Additional coverages Extensions of coverage Deductible and loss payment Unit owner's insurance Waiver of rights Optional coverages Definitions Fitting the insurance to condominium requirements
Introduction
The Insurance Services Office (ISO) commercial property program provides separate forms for insuring condominium properties from those used for general property. A single form—CP 00 17—is used for condominium associations. This form is used in conjunction with declaration forms, common policy and commercial property coverage conditions, causes of loss, and any of various other endorsements.
1.Covered Property
Covered Property, as used in this Coverage Part, means the type of property described in this section, A.1., and limited in A.2., Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property.
a.Building, meaning the building or structure described in the Declarations, including:
(1)Completed additions;
(2)Fixtures, outside of individual units, including outdoor fixtures;
(3)Permanently installed:
(a)Machinery; and
(b)Equipment;
(4)Personal property owned by you that is used to maintain or service the building or structure or its premises, including:
(a)Fire extinguishing equipment;
(b)Outdoor furniture;
(c)Floor coverings; and
(d)Appliances used for refrigerating, ventilating, cooking, dishwashing or laundering that are not contained within individual units;
(5)If not covered by other insurance:
(a)Additions under construction, alterations and repairs to the building or structure;
(b)Materials, equipment, supplies, and temporary structures, on or within 100 feet of the described premises, used for making additions, alterations or repairs to the building or structure; and
(6)Any of the following types of property contained within a unit, regardless of ownership, if your Condominium Association Agreement requires you to insure it:
(a)Fixtures, improvements and alterations that are a part of the building or structure; and
(b)Appliances, such as those used for refrigerating, ventilating, cooking, dishwashing, laundering, security or housekeeping.
But Building does not include personal property owned by, used by or in the care, custody or control of a unit-owner except for personal property listed in paragraph A.1.a.(6) above.
Analysis
The current version of the CP 00 17 clarifies that coverage for the building is exclusive of items such as fixtures found in individual units (except for that required to be insured by the condominium association). Since the CP 00 10 is for a commercial establishment, it is unnecessary to restrict coverage to nonindividual units, so “fixtures, including outdoor fixtures” are covered. Further, “appliances used for refrigerating…” are covered under the CP 00 10 without the condominium language that limits coverage to appliances not contained in individual units.
Another difference in the coverage provision is in item (6), which is not found in the CP 00 10. This item adds to the building definition of fixtures, improvements, and alterations that are part of the building or structure, and appliances “such as those used for refrigerating, ventilating, cooking, dishwashing, laundering, security, or housekeeping,” when such property is contained within a unit, regardless of ownership, if the condominium association agreement requires the association to insure it. For example, lighting fixtures, built-in cabinets or bookshelves, or a dishwasher that the individual unit owner has installed will be covered by the association coverage form if the association agreement requires that the association insure such property. Note that this extension picks up in part items not included in building item (4)—but only property within a unit, not in the common area.
b.Your Business Personal Property located in or on the building or structure described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises, consisting of the following:
(1)Personal property owned by you or owned indivisibly by all unit-owners;
(2)Your interest in the labor, materials or services furnished or arranged by you on personal property of others; and
(3)Leased personal property for which you have a contractual responsibility to insure, unless otherwise provided for under Personal Property of Others.
But Your Business Personal Property does not include personal property owned only by a unit-owner.
Analysis
In place of the seven-item definition of “your business personal property” of form CP 00 10, form CP 00 17 uses a shorter definition adapted for condominiums. However, it uses the term “your business personal property,” a misnomer for condominium property except in a commercial condominium or a new condominium still under control of the developer. A residential condominium controlled by the unit owners is in no sense a business and does not have “business property.” Older condominium forms simply refer to “personal property of the insured,” a more apt description. Nonetheless, this is not likely to cause problems.
The remainder of the definition makes it reasonably clear what property this provision intends to cover—personal property in or on the building or structure described in the declarations or in the open or in a vehicle within 100 feet of the premises, owned by the insured or indivisibly by all unit owners, but not personal property “owned only by a unit owner.” Included is the insured's interest in labor, materials, or services furnished or arranged on property of others. Leased personal property that the association has a contractual responsibility to insure is included in the definition. So, for example, if the association leases equipment for grounds maintenance, it will be covered.
The CP 00 17 contains the same coverage for property of others as the CP 00 10.
2.Property Not Covered
Covered Property does not include:
b.Animals, unless owned by others and boarded by you;
h.Land (including land on which the property is located), water, growing crops or lawns (other than lawns which are part of a vegetated roof);
k.Property that is covered under this or any other policy in which it is more specifically described, except for the excess of the amount due (whether you can collect on it or not) from that other insurance.
n. Electronic data, except as provided under the Additional Coverage, Electronic Data. Electronic data means information, facts or computer programs stored as or on, created or used on, or transmitted to or from computer software (including systems and applications software), on hard or floppy disks, CD-ROMs, tapes, drives, cells, data processing devices or any other repositories of computer software which are used with electronically controlled equipment. The term computer programs, referred to in the foregoing description of electronic data, means a set of related electronic instructions which direct the operations and functions of a computer or device connected to it, which enable the computer or device to receive, process, store, retrieve or send data. This paragraph, n., does not apply to electronic data which is integrated in and operates or controls the building's elevator, lighting, heating, ventilation, air conditioning or security system;
q. The following property while outside of buildings:
(1) Grain, hay, straw or other crops; or
(2) Fences, radio or television antennas (including satellite dishes) and their
lead-in wiring, masts or towers, trees, shrubs, or plants (other than trees, shrubs or plants which are “stock” or are part of a vegetated roof), all
except as provided in the Coverage Extensions.
Analysis
The list of seventeen items of property not covered is identical under forms CP 00 10 and CP 00 17 with two minor exceptions. The exemption from the exclusion of animals owned as “stock” while inside of buildings, found in form CP 00 10, is not included in form CP 00 17. The condominium form also refers to property covered under “this or any other policy,” while the CP 00 10 refers to “property that is covered under another coverage form.” The change in wording appears to reflect the blending of commercial coverage with personal coverage found in the HO 00 06. In other words, the unit owner would be more likely to understand the HO 00 06 as a “policy of insurance” rather than a “coverage form.”
As does the CP 00 10, the CP 00 17 adds that “trailers” are not included as motor vehicles, “to the extent” that such trailers are covered by the new coverage extension.
In section h. Land, ISO broadened coverage with the 2012 edition of the form by making an exception for lawns that are part of a vegetated roof. Such property is treated as an insured part of the building. Subsequently, trees, shrubs, and plants that are part of a vegetated roof are not excluded by section q., which states that certain property while outside of buildings is considered property not covered.
The 2012 edition also broadened coverage by excluding “electronic data which is integrated in and operates or controls the building's elevator, lighting, heating, ventilation, air conditioning or security system” from property not covered in section n. Electronic data.
The CP 00 17 provides the same additional coverages as the CP 00 10, including the electronic data additional coverage. For more on this coverage see Building and Personal Property Coverage Form.
4. Additional Coverages
a. Debris Removal
(1) Subject to Paragraphs (2), (3) and (4), we will pay your expense to remove debris of Covered Property and other debris that is on the described premises, when such debris is caused by or results from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date of direct physical loss or damage.
(2)Debris Removal does not apply to costs to:
(a)Remove debris of property of yours that is not insured under this policy, or property in your possession that is not Covered Property;
(b)Remove any property that is Property Not Covered, including property addressed under the Outdoor Property Coverage Extension;
(c)Remove property of others of a type that would not be Covered Property under this Coverage Form;
(d)Remove deposits of mud or earth from the grounds of the described premises;
(e)Extract “pollutants” from land or water; or
(f)Remove, restore or replace polluted land or water.
(3)Subject to the exceptions in Paragraph (4), the following provisions apply:
(a)The most we will pay for the total of direct physical loss or damage plus debris removal expense is the Limit of Insurance applicable to the Covered Property that has sustained loss or damage.
(b)Subject to (a) above, the amount we will pay for debris removal expense is limited to 25% of the sum of the deductible plus the amount that we pay for direct physical loss or damage to the Covered Property that has sustained loss or damage. However, if no Covered Property has sustained direct physical loss or damage, the most we will pay for removal of debris of other property (if such removal is covered under this Additional Coverage) is $5,000 at each location.
(4)We will pay up to an additional $25,000 for debris removal expense, for each location, in any one occurrence of physical loss or damage to Covered Property, if one or both of the following circumstances apply:
(a)The total of the actual debris removal expense plus the amount we pay for direct physical loss or damage exceeds the Limit of Insurance on the Covered Property that has sustained loss or damage.
(b)The actual debris removal expense exceeds 25% of the sum of the deductible plus the amount that we pay for direct physical loss or damage to the Covered Property that has sustained loss or damage.
Therefore, if (4)(a) and/or (4)(b) applies, our total payment for direct physical loss or damage and debris removal expense may reach but will never exceed the Limit of Insurance on the Covered Property that has sustained loss or damage, plus $25,000.
Analysis
The debris removal additional coverage was revamped in the 2012 edition of the form. Not only is the removal of debris of covered property covered, but other debris that are on the described premises is included, as well. This broadening of coverage has required the additional coverage to be more specific, adding four items to the list describing to what debris removal cost does not apply: removal of the insured's debris that are not insured under the policy or that is in the insured's possession that is not covered property; removal of property classified as property not covered; removal of property of others of that type of property would not be covered under the form; and removal of deposits of mud or earth from the grounds.
The 2012 form also saw an increase in the limit under this additional coverage—from $10,000 to $25,000. The examples were updated to include the new limit. The limit for the removal of property of others is $5,000.
c.Fire Department Service Charge
When the fire department is called to save or protect Covered Property from a Covered Cause of Loss, we will pay up to $1,000 for service at each premises described in the Declarations unless a higher limit is shown in the Declarations. Such limit is the most we will pay regardless of the number of responding fire departments or fire units, and regardless of the number or type of services performed.
This Additional Coverage applies to your liability for fire department service charges:
(1) Assumed by contract or agreement prior to loss; or
(2) Required by local ordinance.
No Deductible applies to this Additional Coverage.
Analysis
In the 2012 edition, ISO added language to clarify that the fire department service charge limit of $1,000 applies to each premises. The limit applies regardless of the number or types of services performed or the number of responders.
f.Electronic Data
(1)Under this Additional Coverage, electronic data has the meaning described under Property Not Covered, Electronic Data. This Additional Coverage does not apply to electronic data which is integrated in and operates or controls the building's elevator, lighting, heating, ventilation, air conditioning or security system.
Analysis
Section 1 of the electronic data additional coverage was updated to reflect that “data which is integrated in and operates or controls the building's elevator, lighting, heating, ventilation, air conditioning or security system” is not considered property not covered, as per the 2012 revisions to the form.
Like the CP 00 10, the CP 00 17 removed the valuable paper and records – cost of research coverage extension and replaced it with the valuable papers and records (other than electronic data) extension. Valuable papers and records contained in electronic format are addressed in the additional coverage for electronic data.
As does the current version of the CP 00 10, the CP 00 17 provides a coverage extension of up to $5,000 for nonowned detached trailers used by the insured in its business.
g.Business Personal Property Temporarily In Portable Storage Units
(1)You may extend the insurance that applies to Your Business Personal Property to apply to such property while temporarily stored in a portable storage unit (including a detached trailer) located within 100 feet of the described premises.
(2)If the applicable Covered Causes of Loss form or endorsement contains a limitation or exclusion concerning loss or damage from sand, dust, sleet, snow, ice or rain to property in a structure, such limitation or exclusion also applies to property in a portable storage unit.
(3)Coverage under this Extension:
(a)Will end 90 days after the business personal property has been placed in the storage unit;
(b)Does not apply if the storage unit itself has been in use at the described premises for more than 90 consecutive days, even if the business personal property has been stored there for 90 or fewer days as of the time of loss or damage.
(4)Under this Extension, the most we will pay for the total of all loss or damage to business personal property is $10,000 (unless a higher limit is indicated in the Declarations for such Extension) regardless of the number of storage units. Such limit is part of, not in addition to, the applicable Limit of Insurance on Your Business Personal Property. Therefore, payment under this Extension will not increase the applicable Limit of Insurance on Your Business Personal Property.
(5) This Extension does not apply to loss or damage otherwise covered under this Coverage Form or any endorsement to this Coverage Form or policy, and does not apply to loss or damage to the storage unit itself.
Analysis
ISO added a coverage extension for business personal property in storage units with the 2012 revision. The coverage is provided for ninety days for property temporarily stored in a portable storage unit located within one hundred feet of the described premises. The limit is $10,000, regardless of the number of storage units, but the limit can be increased if a different amount is entered in the declarations.
Deductible and Loss Payment
Added to the loss payment provision of form CP 00 17 is the following clause that is not included in form CP 00 10: “If you name an insurance trustee, we will adjust losses with you, but we will pay the insurance trustee. If we pay the trustee, the payments will satisfy your claims against us.” This reflects the common practice among condominiums of naming a trustee to act on behalf of the unit owners in common on insurance and other financial matters. The remainder of the loss payment provisions are identical to those of form CP 00 10.
6.Unit-Owner's Insurance
A unit-owner may have other insurance covering the same property as this insurance. This insurance is intended to be primary, and not to contribute with other insurance.
Analysis
This provision is unique to form CP 00 17. It provides that the insurance for the condominium association is primary and not contributory with any insurance on the same property carried by individual unit owners. This provision is complementary to the provision of unit owners form HO 00 06 and commercial unit owners form CP 00 18 that makes that insurance excess over any insurance on the same property provided for the condominium association.
9.Waiver Of Rights Of Recovery
We waive our rights to recover payment from any unit-owner of the condominium that is shown in the Declarations.
Analysis
This provision is also unique to form CP 00 17. It waives the insurer's right of recovery against unit owners for damage to insured property for which the insurer has paid the association. It modifies the general subrogation provision—now called “transfer of rights of recovery against others to us”—found in the commercial property conditions, form CP 00 90, with respect to unit owners only.
The CP 00 17 offers the same optional coverages as the CP 00 10. For more on optional coverages see Building and Personal Property Coverage Form.
A definition of fungus was added in the 2002 form: “any type or form of fungus, including mold or mildew, and any mycotoxins, spores, scents or by-products produced or released by fungi.”
A definition of stock was added in the 2012 form: “merchandise held in storage or for sale, raw materials and in-process or finished goods, including supplies used in their packing or shipping.”
Fitting the Insurance to Condominium Requirements
The definition of covered property in form CP 00 17 is very broad. In many cases the insurance requirements found in the condominium declarations or bylaws call for more limited coverage by the association, sometimes limiting the association's coverage to the original installation or even to the “bare walls.” In such cases, it is necessary to modify the description of property covered by the policy to conform to this requirement. A general purpose endorsement, CP 14 20 11 91, Additional Property Not Covered, can be used, with manuscripted language to fit the particular condominium requirements.
In some states, the condominium law spells out the way the property will be insured—what property is to be covered by the association and what by the unit owners individually. For these states, ISO has provided modifying state endorsements adapting the property definition to the state requirements.