ISO has revised the Causes of Loss – Special Form CP 10 30 09 17 CP 10 30 09 17 to broaden coverage with respect to accidental discharge or leakage from water or sewer pipes that are part of a municipal water or sewer system. The broadening will now include language reference to the section of pipe that is connected to the water or sewer supply system; and such systems will no longer be limited to municipal systems.
Special Causes of Loss Revision
The wear and tear exclusion under the current Causes of Loss – Special Form provides that the wear and tear must be from a “specified cause of loss” to be covered, and the definition for “specified cause of loss” includes within it, “accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe that is located off the described premises … caused by wear and tear.”
ISO is broadening the coverage under this definition by adding a reference to the section of pipe that is connected to the water supply or sewer system. In addition, the coverage is broadened by removing the reference to municipal systems so that the coverage will now apply to potable water supply systems and sanitary sewer systems that are operated by a public or private utility service provider.
2. “Specified causes of loss” means the following: fire; lightning; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage. …
c. Water damage means: . . . -
(2) Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe caused by wear and tear when the pipe is located off the described premises and is connected to or is part of a potable water supply system or sanitary sewer system operated by a public or private utility service provider pursuant to authority granted by the state or governmental subdivision where the described premises are located.
Analysis:
The revision to the “specified causes of loss” definition is a broadening of coverage to provide for water damage as a result of accidental discharge or leakage resulting from wear and tear of water or sewer pipes when they are connected to or are part of the water supply system or sanitary sewer system, as long as those systems are operated as the legal public or private utility service provider for the premises where such pipes are located.