Business Personal Property—Newly Acquired

 

August 28, 2017

 

Insured has a CP 00 01 (07/02) – No deductible 

An insured has a few buildings and one of the buildings is used to store some of his BPP : He has $200,000 of BPP in this building and has the BPP insured for $200,000- so it is insured adequately.  Later he buys more BPP (newly acquired property) $110,000 worth. He places this additional BPP in this storage building. Only 10 days goes by after the purchase and he not yet called his carrier to add this newly acquired property. Now a fire consumes the building and all the BPP is destroyed.  

How much should the carrier pay the insured for the BPP? 

North Carolina Subscriber

Since ISO does not have a 07 02 edition of CP 00 01, this response is based off of the 04 02 edition of CP 00 01.

Since the limit of insurance for the BPP is $200,000, then that is the amount of coverage that is available for the loss to BPP.  

Although the extension for Your BPP (2)(a) would provide for newly acquired BPP, the amount available under this extension is subject to the actual BPP limit of insurance. The coverage extension is not an additional limit of coverage; rather it is an extension of the coverage provided under the BPP limit.