“Foundations” as Property Not Covered

 

Under “property not covered,” the commercial property policy (CP 00 10 04 02) reads, “foundations of buildings, structures, machinery or boilers if their foundations are below: (1) the lowest basement floor; or (2) the surface of the ground, if there is no basement.”

Some adjusters say that, because of the use of “their foundations,” instead of “the foundations,” then machinery on a foundation with a top surface below ground level is not covered. If “the” had been used, then coverage would be effective as to machinery but not as to the foundation.

Which is the appropriate position?

Florida Subscriber

Only foundations are the subject of the commercial property policy's provision A.2.g regarding foundations as Property not Covered.

The entire clause goes back to the word “foundation.” Foundations of buildings, structures, machinery or boilers are not covered property if the foundation is below the lowest basement floor or the surface of the ground, if there is no basement. The use of the word “their” rather than “the” does not affect coverage for the building, structure, machinery or boiler. Those remain items of covered property, and are not included in the scope of property-not-covered.