Introduction

 

MS FL 01 is an endorsement that modifies the CGL forms CG 00 01 04 13 and CG 00 02 04 13, the commercial property form (CP 00 10), and the causes of loss—special form (CP 10 30). The provisions of these forms apply to the risk except as otherwise provided in MS FL 01. The endorsement enhances the coverages provided by the standard forms by offering additional property coverages, some crime coverages, and delivery errors and omissions coverage. The limits of insurance offered by MS FL 01 are base limits that can be increased through the use of a supplemental schedule, MS FL DS. There is also a fine arts endorsement that pays for a direct loss to fine arts, a term that includes antiques, paintings, sculptures, and china.

 

Changes to the Commercial Property Form

 

MS FL 01 changes the commercial property form by increasing the fire department service charge limit from $1,000 to $5,000. This particular coverage applies when the fire department is called to save or protect covered property from a covered cause of loss, such as a fire. The $5,000 is the amount available for the department service charges that are assumed by contract prior to the loss, or that are required by local ordinance.

 

Additional Coverages

 

MS FL 01 adds the following coverages to the additional coverages section of CP 00 10.

 

Money and Securities. MS FL 01 will pay for loss of money and securities used in the business of the named insured while at a bank or savings institution, within the living quarters of the named insured and certain employees, while at the described premises, or while in transit between any of these places. The loss must be caused by theft (meaning any act of stealing), disappearance, or destruction. Loss resulting from accounting errors or arithmetical errors or omissions is not covered. Also not covered is loss due to the giving or surrendering of property in any exchange or purchase, or loss of property contained in any money-operated device, unless the amount of money deposited in the device is recorded by a continuous reading instrument in the device. The most the insurer will pay for this coverage in any one occurrence is $5,000 for money and securities while in a bank or in the described premises; the most paid for loss of money and securities while anywhere else is $2,500.

 

The endorsement notes that all loss caused by one or more persons and involving a single act or series of related acts is considered one occurrence. And, the named insured must keep records of all money and securities so that the insurer can verify the amount of any loss or damage.

 

Fire Extinguisher Systems Expense. The most paid under this additional coverage is $5,000 in any one occurrence, with no deductible applying. This applies to the cost of recharging or replacing (whichever is less) the fire extinguishers and fire extinguishing systems if they are discharged in or on the building described in the declarations, or within 100 feet of the building, or within 100 feet of the described premises. The coverage also applies to loss or damage to covered property is the loss or damage is the result of an accidental discharge of chemicals from the fire extinguisher systems. No coverage will apply if the fire extinguishing system is discharged during installation or testing.

 

Reward Payment. MS FL 01 will reimburse the named insured for rewards paid up to $5,000. This payment can go to an eligible person (a defined term) for information leading to the arrest and conviction of any person or persons committing a crime resulting in loss to covered property from a covered cause of loss. The same amount can be paid to an eligible person for the return of stolen property when the loss is caused by theft.

 

There are restrictions to this coverage. The insurer will pay no more than the lesser of the following amounts (regardless of the $5,000 amount mentioned here): the actual cash value of the covered property at the time of loss (but not more than the amount required to repair or replace the property), or the amount determined by the loss settlement procedure applicable to the covered property under the loss payment condition found in CP 00 10. No reward will be reimbursed unless and until the person committing the crime is convicted or the covered property is returned.

 

An eligible person means that person designated by a law enforcement agency as being the first to voluntarily provide the information leading to the arrest and conviction of the person that committed the crime. The following are not considered eligible persons: the named insured or any family member; the named insured's employee or any of his family members; an employee of a law enforcement agency; an employee of a business engaged in property protection; any person who had custody of the covered property at the time the theft was committed; or any person involved in the crime.

 

Computer Fraud. This coverage is for loss of or damage to money, securities, and other property resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside a building at the described premises or from a bank to a person or place outside those premises. The most paid under this additional coverage is $5,000, unless a different limit for computer fraud is shown in the declarations (MS FL DS).

 

Money Orders and Counterfeit Money. The insurer will pay for loss resulting directly from the named insured's having accepted in good faith, in exchange for merchandise, money or services, money orders that are not paid upon presentation or counterfeit money acquired during the regular course of business. The most paid here is $1,500 unless a different limit is shown in the schedule of MS FL DS.

 

Forgery or Alteration. MS FL 01 will pay for loss resulting directly from forgery or alteration of checks, drafts, promissory notes, or similar written promises, orders, or directions to pay a sum certain in money that are made or drawn by or drawn upon the named insured, or made or drawn by one acting as the named insured's agent. If the named insured is sued for refusing to pay any such instrument on the basis that it has been forged or altered, the insurer will pay for reasonable legal expenses; the insured must first receive written consent from the insurer to defend the matter. The most paid under this coverage is $2,500, and this includes the defense expenses of the insured.

 

Mechanically reproduced facsimile signatures are treated the same as handwritten signatures.

 

Outdoor Signs. MS FL 01 will pay for direct physical loss of or damage to all outdoor signs at the described premises owned by the named insured, or at premises owned by others but in the insured's care, custody, or control. The most paid here is $5,000. Loss or damage caused by the following is not covered: wear and tear; hidden or latent defect; rust; corrosion; or mechanical breakdown. The provisions here supersede all other outdoor signs coverage references in CP 00 10.

 

Employee Dishonesty. This coverage applies to a direct loss of or damage to the named insured's business personal property, money, or securities resulting from dishonest acts committed by an employee. The employee has to have the manifest intent to cause the named insured to sustain loss or damage and also to obtain financial benefit. Indirect loss or damage (such as the inability to realize income), expenses related to any legal action, or loss the only proof of which as to its existence is an inventory computation are not covered losses. The most that will be paid by the insurer under this additional coverage in any one occurrence is $5,000. All loss or damage caused by one or more employees and involving a single act or series of related acts is considered to be one occurrence.

 

The insurer will pay only for loss or damage the named insured sustains through acts committed or events occurring during the policy period. Regardless of the number of years the policy is in force or the number of premiums paid, no limit of insurance cumulates from year to year or period to period. And, the coverage will be paid only for covered loss or damage discovered no later than one year from the end of the policy period.

 

Ordinance or Law—Equipment Coverage. If a covered cause of loss occurs to refrigeration equipment that is covered property, MS FL 01 will pay the following: the cost to reclaim the refrigerant as required by law; the cost to retrofit the equipment to use a non-CFC refrigerant as required by law; and the increased cost to recharge the system with a non-CFC refrigerant. The terms of this coverage apply separately to each piece of covered equipment, and the coinsurance additional condition does not apply to this coverage. And, this coverage is not meant to apply to costs associated with the clean up of pollutants.

 

Spoilage Coverage. MS FL 01 will pay for loss of perishable stock (a defined term) caused by the following: a change in temperature or humidity resulting from mechanical breakdown or failure of refrigeration at the described premises; contamination by a refrigerant; or power outage either on or off the described premises due to conditions beyond the control of the named insured. The most to be paid under this coverage is $25,000 (unless a different limit for spoilage coverage is shown in the declarations), and there is a deductible. The insured is required to maintain a refrigeration maintenance or service agreement, and if the insured terminates this agreement and does not notify the insurer, this spoilage coverage is automatically suspended.

 

Artificially Generated Electrical Current. This endorsement will pay for loss or damage to computers due to artificially generated electrical current if such loss or damage is caused by or results from an occurrence that took place within 1,000 feet of the described premises. Also covered is loss or damage caused by an interruption of electric power supply, power surge, blackout or brownout if the cause of such occurrence took place within 1,000 feet of the described premises. There is a deductible applicable to this coverage.

 

Coverage Extensions

 

MS FL 01 amends the coverage extensions section of CP 00 10 in the following ways.

 

Newly Acquired or Constructed Property. The period of coverage provision of newly acquired or constructed property is changed by MS FL 01. Coverage ends when any of the following first occurs: the policy expires; thirty days expire after the property is acquired or construction begun; with respect to computers, when specific insurance at the newly acquired premises is obtained; or when the named insured reports values to the insurer. Additional premium is charged for values reported from the date the named insured acquires the new property, or begins construction of that part of the building that would qualify as covered property.

 

Personal Effects and Property of Others. MS FL 01 extends the insurance that applies to the named insured's business personal property to personal effects owned by the named insured, officers, partners or members, managers, or the named insured's employees. Loss or damage by theft is not covered here. Also covered is the personal property of others in the care, custody, or control of the named insured. The most paid under this extension is $5,000 in any one occurrence at each described premises.

 

Valuable Papers and Records. Direct physical loss or damage to valuable papers and records that the named insured owns or that are in the care, custody, or control of the named insured is covered. This extension of coverage includes the cost to research lost information on valuable papers and records for which no duplicates exist. This extension does not apply to valuable papers and records that exist as electronic data. It also does not apply to property held as samples or for delivery after sale, or to property in storage away from the premises shown in the declarations. The insurer will also pay for the cost of blank material for reproducing the records and for the cost of labor to transcribe or copy the records; the costs of blank material and labor are subject to the applicable limit of insurance on the named insured's business personal property.

 

Coverage under this extension is limited to the specified causes of loss as defined on the causes of loss—special form, CP 10 30. And, the most that the insurer will pay here is $10,000 in any one occurrence at each described premises. For valuable papers and records not at a described premises, the most to be paid is $5,000 in any one occurrence. These amounts are additional insurance.

 

Property Off-Premises. The named insured may extend the insurance provided by MS FL 01 to apply to covered property while it is away from the described premises under the following conditions: the property must be temporarily at a location not owned, leased, or operated by the named insured; or the property must be in storage at a location the named insured leases, provided the lease was executed after the beginning of the current policy term; or the property must be at any fair, trade show, or exhibition. The most that will be paid under this extension is $10,000 in any one occurrence.

 

This extension does not apply to property in or on a vehicle (except for computers), or to property in the care, custody, or control of the named insured's salespersons (unless at a fair, trade show, or exhibition).

 

Outdoor Property. This coverage extension applies to the following items. Fences and retaining walls that are not part of a building are covered for up to $5,000 in any one occurrence. Outdoor radio, television, satellite or other antennas, including their masts, towers, and lead-in and support wiring are covered for loss or damage up to $3,000 in any one occurrence. Trees, shrubs, and plants (other than stock) are covered for loss or damage (including debris removal expense) for up to $5,000 for any one occurrence; but, not more than $500 will be paid for any one tree, shrub, or plant.

 

The following are the covered causes of loss under this item: fire, lightning, explosion, riot or civil commotion, or aircraft.

 

Accounts Receivable. This coverage extension is for direct physical loss or damage by any covered cause of loss to the named insured's records of accounts receivable. The insurer will pay the following: all amounts due from the named insured's customers that cannot be collected; interest charges on any loan required to offset amounts that the named insured is unable to collect; collection expenses in excess of the normal collection expenses; and other reasonable expenses that the named insured incurs to re-establish the records. The most to be paid here in any one occurrence at each described location is $5,000; for accounts receivable not at a described premises, the most we will pay is $2,500 in any one occurrence.

 

Changes to the Causes of Loss Form

 

This part of MS FL 01 amends some exclusions that appear on the causes of loss—special form, CP 10 30, and also adds some exclusions that apply only to coverage for computers.

 

The first noted change is that the ordinance or law exclusion in the exclusions section of CP 10 30 does not apply to the ordinance or law coverage that MS FL 01 provides.

 

Another change is that the mechanical breakdown exclusion does not apply to loss or damage to computers.

 

The paragraphs in CP 10 30 that reference the excluded causes of loss to personal property are replaced as follows. MS FL 01 does not provide coverage for loss or damage caused by or resulting from any of the following causes of loss to personal property: dampness or dryness of atmosphere; changes in or extremes of temperature; marring or scratching.

The following are added as exclusions and, as noted previously, apply only to coverage for computers.

 

Errors or Omissions. MS FL 01 will not pay for loss or damage caused directly or indirectly by errors or omissions in processing, recording, or storing electronic data in computers. However, the policy will pay for direct loss or damage caused by a resulting fire or explosion if these causes of loss would otherwise be covered by the policy.

 

Electrical Disturbance. MS FL 01 will not pay for loss due to electrical or magnetic injury, disturbance, or erasure of electronic recordings. However, direct loss or damage caused by lightning is covered.

 

Computer-Related Losses. The failure, malfunction, or inadequacy of computer hardware, software, operating systems, networks, computer chips, or any other computerized or electronic equipment to correctly recognize, process, interpret, or accept one or more dates or times is excluded from coverage by MS FL 01.

 

Computer Advice or Consultation. This endorsement does not cover any advice, consultation, design, evaluation, inspection, or supervision provided or done by the named insured to rectify or test for any potential or actual problems described in the computer-related losses exclusion section.

 

Another change is made in that the exclusions section does not apply to coverage for employee dishonesty, outdoor signs, or valuable papers, except for the following exclusions: governmental action; nuclear hazard; war and military action; wear and tear; mechanical breakdown; water leaking from plumbing or heating equipment; weather conditions; acts or decisions of any person or organization or governmental body; or faulty, inadequate, or defective planning, design, or maintenance.

 

Finally, an additional exclusion is noted to apply to the accounts receivable coverage extension. MS FL 01 will not pay for loss or damage caused by or resulting from alteration, falsification, concealment, or destruction of records of accounts receivable done to conceal the wrongful giving, taking, or withholding of money, securities, or other property. Also not covered is loss or damage caused by or resulting from bookkeeping, accounting, or billing errors or omissions. And, any loss or damage that requires any audit of records or any inventory computation to prove its factual existence is not covered.

 

Changes to the CGL Form

 

MS FL 01 adds some coverage to the CGL form, CG 00 01; it is for delivery errors and omissions as befits a florist exposure that is in the business of delivering flowers.

 

MS FL 01 will pay those sums that the insured becomes legally obligated to pay as damages because of a failure to deliver or a misdelivery of items by any employee or by a concessionaire trading under the name of the named insured. The most the insurer will pay under this coverage is $10,000 for the sum of all damages because of all failures or misdeliveries in any annual period; this limit applies separately to each premises described in the declarations. The insurer has the duty to defend the insured against any lawsuit seeking damages, and reserves for itself the right to settle any claim or lawsuit.

 

There is a $250 deductible under this coverage and the insurance applies only to errors in deliveries that take place in the coverage territory and during the policy period.

 

This insurance does not apply to the following: intentional error or failure to deliver; bodily injury, property damage, or personal and advertising injury; or discrimination.

 

The supplementary payments provisions on the commercial general liability coverage form also apply to this delivery errors and omissions coverage.

 

The who is an insured section of the CGL form is amended to include as an insured any person or organization with respect to their liability arising out of their financial control of the named insured, or premises they own or control while the named insured leases or occupies these premises. Any other person who is a manager or lessor of the premises described in the declarations and leased to the named insured is also an insured under the florists form, MS FL 01.

 

The duties in the event of occurrence, claim, or suit condition is changed for the delivery errors and omissions coverage. In the event of a delivery error or omission, the named insured has to notify the insurer as soon as practicable. This notice should include how, where, and when the error or omission took place, and the names and addresses of the affected customers. Any legal notices and lawsuits have to be sent to the insurer as soon as practicable and the insured has to cooperate with the insurer in the investigation and settlement of the claim. Efforts at subrogation by the insurer must also be supported by the insured once the insurer requests such aid. And, of course, the insured will not voluntarily make a payment, assume any obligation, or incur any expense without the consent of the insurer.

 

Definitions

 

There are nine definitions listed in the Florists market segments endorsement.

 

Computer. This means programmable electronic equipment used to store, retrieve, and process electronic data. It includes component parts and associated peripheral equipment that provides communication, but does not include electronic data and media.

 

Counterfeit Money. This means an imitation of money that is intended to deceive and to be taken as genuine.

 

Employee. This is any natural person while in the service of the named insured and who is compensated directly by the named insured, and who the named insured has the right to direct and control. Temporary substitute workers are also considered as employees while subject to the direction and control of the named insured while performing services for the named insured. An employee is not a labor leasing firm, an independent contractor, or any manager, director, or trustee (except while performing acts coming within the scope of the usual duties of an employee).

 

Forgery. This means the signing of the name of another person with the intent to deceive.

 

Manager. A manager is a person serving in a directorial capacity for a limited liability company.

 

Member. Means an owner of a limited liability company represented by its membership interest who also may serve as a manager.

 

Money. Money is currency, coins, money orders, and bank notes in current use and having a face value.

 

Perishable Stock. This is personal property maintained under controlled conditions for its preservation and susceptible to loss or damage if the controlled conditions change.

 

Securities. Securities means negotiable and non-negotiable instruments or contracts representing either money or other property. This includes food stamps, lottery tickets, tokens, and evidences of debt issued in connection with credit or charge cards. Securities do not include money.

 

Endorsements

 

MS FL 02. MS FL 02 09 04 is an endorsement that provides equipment breakdown protection coverage for the insured. It pays for direct loss or damage to covered property at the premises described in the declarations caused by or resulting from a mechanical breakdown or electrical failure to pressure, mechanical, or electrical machinery or equipment. This endorsement states that the following exclusions in the causes of loss—special form do not apply: the artificially generated electrical current exclusion; the mechanical breakdown exclusion; and the exclusion relating to explosion of steam boilers, pipes, engines, or turbines.

 

The limitation in CP 10 30 relating to steam boilers, pipes, engines, or turbines does not apply, and the limitation relating to hot water boilers or other water heating equipment also does not apply.

 

This coverage has a deductible that applies and a waiting period applicable to the premises described in the declarations. As to the waiting period, the 72 hour time period in the definition of the period of restoration in the business income and extra expense coverage form is changed according to the time listed in the declarations. If the insured chooses not to list a time period in the application, the 72 hour period applies.

 

MS FL 03. This endorsement provides fine arts coverage for the named insured. The insurer will pay for direct loss of or damage to fine arts whether owned by the named insured or owned by others and in the care, custody, or control of the named insured. Fine arts includes, but is not limited to, the following: antiques; paintings; etchings; drawings; tapestries; sculptures; and fragile property such as porcelains, china, and marble.

 

The most to be paid for loss in any one occurrence under this endorsement is $25,000 at each described premises. This is additional insurance over the insurance available for business personal property. The value of fine arts will be the least of the following amounts: the actual cash value; the cost of reasonably restoring the property to its condition immediately before loss; or the cost of replacing that property with substantially identical property. In the event of loss, the value of the property will be determined as of the time of loss.

 

In case of loss to any part of a pair or set, the insurer will repair or replace any part to restore the pair or set to its value before the loss, or pay the difference between the value of the pair or set before and after the loss.

 

The named insured is required under this endorsement to arrange for fine arts to be packed and unpacked by competent packers.

 

MS FL DS. This endorsement is the supplemental schedule that is used in conjunction with the commercial property declarations page and the commercial general liability declarations. MS FL DS allows the insured to choose a limit of insurance that is different than the one set in MS FL 01 for various items of coverage. For example, this endorsement allows the insured to choose a limit of insurance for money and securities coverage, computer fraud coverage, outdoor signs, coverage, and accounts receivable coverage. There is even a space for the insured to choose a limit of insurance for an omnibus “other” item.

 

MS FL DS has a space for fine arts coverage wherein the insured can show that the coverage is applicable only to the premises noted. And, the insured can also list the forms applicable to specific premises and coverages.