Analysis

 The lead-in phrase appears to limit coverage to personal property in or on the building described in the declarations. However, the insuring agreement cited previously extends coverage to covered losses that occur outdoors on or within 100 feet of the premises.

 Coverage is limited to tangible personal property. This would exclude coverage for intangible property such as data, copyrights and other intellectual property, or goodwill. Property is covered only if it is both owned by a named insured and used in the business/operations described in the declarations. If these conditions are met, coverage would apply to furniture, fixtures, machinery, equipment, stock, and other types of tangible personal property not excluded elsewhere in the form.

 Business personal property also contemplates coverage of the labor, materials, and supplies provided by the named insured provided in connection with the tangible personal property of others. If, for example, an insured repairs a computer at a cost of $50 in labor, $75 in materials, and $10 for a special trip to acquire a necessary part, $135 is recoverable under this coverage, less any deductible, if the computer is damaged by an insured peril before it can be returned to the customer.

 The form also covers, as personal property, a tenant's remaining use interest in improvements and betterments. Improvements and betterments consist of fixtures, alterations, installations, or additions of a permanent type that have been acquired at some expense by the tenant. They are items of real property such as store fronts, decorations, partitions, or elevators and are not legally removable by a tenant.

 This is not the same as coverage on the full value of the improvements and betterments. A loss settlement provision later in the policy clarifies how improvements and betterments losses are to be settled. A tenant's use interest exists as long as any lease is in force. But if the lease contains an option to renew, then the use interest extends to the end of the option period. If the tenant does not promptly repair damage to improvements and betterments, the insurer's obligation is prorated based on the amount of time that has elapsed since the improvement was installed and the amount of time remaining on the lease or any renewal option. If the named insured promptly repairs the damage, it will be settled on the same basis as other covered property.

 Improvements and betterments coverage does not apply if the landlord includes the cost of the improvements in the tenant's rent or if the landlord bears the cost of repairing damaged improvements and betterments.

 As with any other item or class of covered property, the values of improvements must be taken into account when considering the amount of insurance necessary for compliance with the coinsurance clause.

 Covered Property—Personal Property of Others

 Coverage C – Personal Property of Others

 Analysis

 The third type of direct property loss that can be covered under the building and personal property coverage form is tangible property of others in the insured's care, custody, or control and used in connection with the named insured's business/operations as described in the declarations. Although the wording here appears to limit coverage to personal property in or on the building described in the declarations, the insuring agreement cited earlier extends coverage to covered losses that occur outdoors on or within 100 feet of the premises.

 Any loss to property of others is adjusted "solely for the account of the owner" of the property. The insurer has a right to adjust the loss with the property's owners.

 Business Income/Extra Expense Coverage

 Coverage D – Loss of Use Resulting from Direct Covered Loss

 Analysis

 Business income and/or extra expense coverage is integrated into the General Property Form as coverage D. Approximately one and a half pages of the form describe this coverage, which applies only if appropriate entries are made in the declarations. The opening paragraphs outline the conditions that must exist for a business income and/or extra expense loss to be covered.

 First, the named insured must suffer a loss of business income or incur extra expenses as the result of a direct covered loss. Direct covered loss is defined elsewhere in the policy as "fortuitous direct physical loss [by a covered cause of loss] which occurs at described premises occupied by you…which directly results in the subject covered business income loss/extra expense loss."

 In short, the named insured must suffer a business income and/or extra expense loss as the result of fortuitous direct physical damage to, destruction of, or theft of property by a covered cause of loss. The damaged, destroyed, or stolen property need not belong to the named insured.

 Second, the direct covered loss must result in a necessary interruption of the named insured's business/operations described in the declarations or the untenantability of the premises. Disputes could conceivably arise, in some cases as to whether an interruption was necessary.

 Third, the business income and/or extra expense coverage can be triggered by an order of civil authority that prohibits access to the premises described in the declarations because of damage to another party's property at other premises by a covered cause of loss. For example, a tenant's store might not be damaged by a fire in another part of the shopping mall, but authorities might bar access to the entire mall until an investigation is complete and some of the damage has been cleared.

 B.Coverage Description

 Analysis

 ISO uses three different forms to provide the three basic coverages or coverage combinations available in MSO's General Property Form. Entries in the MSO declarations indicate which coverages apply at each location. For example, if "D.1″ is entered in the "coverages" column for Location 1 Building 1, then business income and extra expense coverage applies at that location. Likewise, D.2 means that only business income coverage applies, and "D.3″ means that only extra expense coverage applies. If none of these "D" entries appears in the declarations for that location, then none of these coverages applies.

 2. Coverage D. 1 – Business Income

 Analysis

 The purpose of business income insurance is to do for the insured during a period of business interruption what the business would have done had no loss occurred. Loss of business earnings, the prime source of money for continuing operating expenses as well as profit (if any) is the subject of this coverage. The form covers loss of net income plus continuing normal operating expenses that businesses would have earned or incurred if no direct damage loss occurred.

 A landlord's income is derived from tenants' rents, and a landlord's business income loss involves a loss of rental income. It is not necessary that premises actually be rented at the time of the loss. Damage to property that is customarily held for rental to others but is temporarily vacant at the time of the loss can also result in a loss of rental income. Adjustment of claims of this type will depend upon proof of what is a reasonably anticipated rental income. For example, if the damaged apartment had gone unrented during the entire year prior to the loss, and the insured had no real prospects for its rental, it is not reasonable to anticipate rental income. If, however, the apartment had been rented consistently prior to the loss, and had only recently been vacated, or if the insured has verifiable prospects for a speedy re-rental, then it is appropriate to anticipate rental income.

The rental income coverage also applies to continuing expenses that are normally paid by the tenant but become the landlord's responsibility because of the direct covered loss. For example, a tenant might normally pay the costs of lighting and heating a building. However, if the building cannot be occupied, the landlord must pay these expenses until the premises are repaired and re-rented.

 Continuing expenses are not covered if they do not actually continue or need to continue. For example, trash collection services might be discontinued while the business is not operating and is not producing any trash.

 3.Coverage D. 2 – Extra Expense

 Analysis

 The form provides coverage for two categories of extra expense: costs to avoid or minimize the suspension of business at replacement or temporary locations and costs to minimize business suspension if operations cannot continue. Examples of extra expenses of doing business at a temporary or replacement location include costs to set up, rent, and move to the new location and the costs to obtain temporary equipment. If operations cannot be continued, some extra expenses may involve the hiring of additional workers or paying existing employees overtime in order to reopen the business.

 Like business income coverage, direct physical damage or loss is required. Only expenses that the business would not otherwise experience except for the direct property loss are covered.

 Extra expenses necessary to maintain the "same capability and quality of service as would otherwise exist" are covered. It might be difficult for some businesses to maintain the same level of service while damaged property is being restored. The insured is not required to make do by minimizing its extra expenses. At the same time, however, any extra expenses the insured incurs must be necessary and reasonable.

 4.Special Costs or Expenses

 Analysis

 There is some overlap between this coverage and the extra expense coverage described previously. However, this provision makes it clear that expenses that reduce the covered business income or extra expense loss are covered whether business income and extra expense, business income only, or extra expense only coverage is purchased. If spending $10,000 on overtime pay to get back in operation sooner reduces the business income loss by $20,000, it is obviously in the insurer's best interest to cover the overtime pay. Special costs might also be incurred to expedite the delivery of stock or equipment needed that enables the business to reopen more quickly.

 Unlike the extra expense coverage that is aimed at maintaining the same level of service or minimizing the period of interruption, these special costs or increased expenses are covered only to the extent they actually reduce the loss the insurer would otherwise be obligated to pay.

 5.Cancellation of Contract

 Analysis

 Whether business income and/or extra expense coverage is provided, if a contract is canceled, lapsed, or suspended because of a covered interruption the insurer will pay for any resulting business income or extra expense loss. The burden of proof is on the insured to demonstrate that the loss would not otherwise have been incurred during the applicable coverage period, as described in the next set of provisions.

 C.Coverage Period(s)

 Analysis

 The basic period of indemnity begins on the date property is damaged by a covered peril. Here the MSO form differs from ISO's forms, which impose a seventy-two-hour time deductible on its period of restoration. The basic period of indemnity ends on the earlier of two dates.

 First, the period ends with "the period required with diligence and ongoing effort" to restore normal operations. Second, even if operations are not restored, the basic period of indemnity ends with the period required to restore the property so it is again ready for operations.

 Both provisions refer to the period required. If it takes longer to restore operations or restore the premises because the named insured does not exercise the necessary degree of diligence and effort, the basic indemnity period ends whenever operations or premises could have been restored.

 2.Civil Authority – Special Period of Indemnity

 Analysis

 The period of indemnity for covered order of civil authority losses runs for a maximum of fourteen consecutive days.

 The period of indemnity lasts a maximum of sixty days if damage to electronic media either causes or contributes to the business income loss. As mentioned earlier, intangible personal property—such as data or computer programs—is not covered property. Covered here is loss resulting from damage to the media—computer disks or drives—on which data are stored, including the data themselves. In other words, the business income coverage provided here does not apply to data that are accidentally erased or corrupted, but it does apply in the event of physical damage to the tangible media on which data or programming records are stored.

 This special period of indemnity can be modified by triggering one of the policy's built-in endorsements.

 Endorsement MCP 501 can lengthen or reduce the indemnity period. For example, the sixty-day period can be changed to a ninety-day period of indemnity by entering "MCP 501″ along with the number "90″ in the declarations.

 If endorsement MCP 508 is triggered by an entry in the declarations, the exclusion for computer hacking or computer viruses is eliminated. The effect of MCP 508 is to cover a business income loss to electronic media caused by hacking or viruses.

 4.Extended Period of Indemnity

 Analysis

 If required, the extended period of indemnity pays for additional loss of business income after property is actually repaired and operations are resumed, with reasonable speed, until the business generates the business income amount that would have existed had no loss occurred. The basic coverage, as shown in the form, applies for up to thirty consecutive days after the basic period of indemnity ends. A longer extended period of indemnity can be provided by triggering endorsement MCP 502 and inserting a higher number in the declarations. For example, entering "MCP 502″ and "90″ in the declarations would provide for a ninety-day extended period of indemnity.

 Extended business income is designed to enable the insured to recapture its market position following the completion of repairs and the resumption of operations. For example, a retailer that endured a long closure for repairs may not see its customers return right away. The loss of income during this period would be covered by the extended period of indemnity.

 5.Policy Term Extension

 Analysis

 Although the direct loss that results in a business income/extra expense loss must take place during the policy term, the period of indemnity may extend past the end of the policy period.

 Although extended or special periods of indemnity extend the time period during which business income/extra expense loss is covered, they do not increase the dollar amount of coverage available.

 D.Special Conditions

 Analysis

 The first special condition applicable to business income and extra expense coverage reiterates an earlier definition of business/operations.

 Finished stock is defined in the form's glossary as stock that is manufactured by the named insured except for stock held in a covered retail store. A manufacturer's finished stock begins with raw materials. Raw materials gain value as they are converted to finished stock over a period of time that sometimes includes an extended aging or drying process. Direct damage, destruction, or loss of stock—raw materials, goods in the process of manufacture, or finished stock—should be covered under the business personal property coverage.

 The business income/extra expense coverages do not cover loss to finished stock, even if damage to the stock is the reason for a business interruption. Likewise, business income coverage does not apply to the manufacturing period; loss to goods in the process of manufacture are reflected in the value of the direct property loss.

 The extra expense coverage, however, does apply to the time required to reproduce finished stock. Extra expenses that expedite the manufacturing process—such as working double shifts once the assembly line is restored—can reduce the business income loss or minimize the period of interruption.

 Interference at the insured premises by strikers or others is specifically excluded, whether the strike occurs at the described premises or elsewhere.

 Losses arising from direct physical loss or damage to radio or television antennas and their lead-in wires, masts, or towers are also not covered. This exclusion may be eliminated by triggering endorsement MCP 503 in the declarations.

 Part I B – Supplemental Coverages

 Supplemental Coverages – Additional Conditions

 Analysis

 The nineteen supplemental coverages printed in this form extend the four main coverages and add additional amounts of insurance as described under each supplement, but they do not otherwise modify the policy.

 Some of the supplemental coverages are "keyed to a percentage of the underlying main coverage." For example, coverage on newly acquired business personal property is keyed to 10 percent of the coverage B limit. This percentage is expressed in decimal form as a factor or multiplier; 10 percent is shown as 0.10.

 Questions could arise when the form covers multiple items, such as personal property at more than one location. If the supplemental coverage can be keyed to a specific described item then the limit is keyed to the coverage limit for that location. For example, if there is a $100,000 limit on business personal property at Location 2, then the 10 percent limit on newly acquired personal property at Location 2 will be keyed to that limit. However, if the supplemental coverage cannot be keyed to a specific described item, then the greatest limit for that coverage is used. If the insured in the previous example also had a $200,000 business personal property limit at Location 1 and acquired personal property at a third location, there would be $20,000 of newly acquired property coverage available to both locations. The two limits are not added together to come up with $30,000 in coverage.

 A similar situation arises when different property items are covered for different causes of loss. Again, coverage is keyed to the perils applicable to a specific described item. When this is not possible, the insurer will use the most relevant causes of loss at the described premises.

 Unless otherwise stated, the coinsurance condition does not apply to the supplemental coverages. The insured is not required to meet a coinsurance requirement with respect to one of these coverages, and the dollar amount of any supplemental coverage cannot be used in satisfying a coinsurance requirement.

 1.Accounts Receivable Coverage

 Analysis

 Accounts receivable coverage applies when the insured's business personal property is covered. A $3,000 limit is preprinted in the supplementary declarations, but this limit may be changed by entering a different number. A $250 deductible is standard, but this is also subject to change either by showing a different deductible amount in the declarations or by entering "MCP 510″ in the declarations. MCP 510 modifies the policy so that the policy's general deductible also applies to accounts receivable coverage.

 Loss must be caused by a covered peril that applies to Coverage B. Coverage does not apply to loss caused by accounting, billing, or bookkeeping mistakes or where proof of the loss depends on an audit or inventory computation. Most other limitations and exclusions do not apply to this coverage. However, the intentional loss and wear and tear exclusions do apply.

 2.Automatic Increase/Peak Season Coverages

 Analysis

 MSO does not use the inflation guard label, but inflation guard coverage applies if a factor is shown for coverage A and/or coverage B. No suggested factor is preprinted in the supplemental declarations, but entering a factor of 0.06 for coverage A would increase the building limit by 6 percent per year. This increase is prorated across the policy year; if the factor shown is 0.06, the limit has automatically increased by 3 percent after six months.

 In other comparable policies, peak season coverage applies during a specific stated time period, presumably the time period when values normally increase. Rather than require specific dates, MSO simply increases coverage "during those periods of time during the year when it is your normal practice to increase the amount of business personal property at the described premises because of customary seasonal or holiday sales."

 Inflation guard and peak season increases apply only to Coverages A and B, not to any of the supplemental coverages.

 3. Building Extension Coverages

 Analysis

 The effect of these three supplements is to include coverage on building glass, outdoor signs, and certain types of personal property under coverage A.

 Depending on the circumstances, glass breakage can be treated as a peril or as the result of another peril. Sometimes glass spontaneously breaks. Often, however, glass damage is the result of another peril such as vandalism or windstorm. The glass extension applies only when a causes of loss option includes glass breakage as a named peril and the glass in question is part of a building. Most glass display cases, for example, do not qualify as part of the building. As discussed later, the glass breakage peril covers damage caused by broken glass, not the broken glass itself, which is the subject of this coverage extension.

 The basic limits printed in the supplemental declarations are $1,000, with a sublimit of $100 per item. Other limits may be entered. Vandalism is subject to these limits. Otherwise, these limits do not apply for loss caused by any of the specified causes of loss; instead, the Coverage A limit applies. As defined in Part I C, the specified causes of loss include fire; aircraft; explosion; falling objects; lightning; riot or civil commotion; sinkhole collapse; smoke; sprinkler leakage; vandalism; vehicles; volcanic eruption; water damage; weight of ice, sleet, or snow; and windstorm/hail when the applicable peril applies to coverage A.

 Outdoor signs are covered for the same perils as the building they are attached to. If the insured has both attached and unattached signs, they are all covered for the same perils. If only unattached signs are involved, they are covered against the basic causes of loss, except for vandalism, which is not covered.

 The policy makes no provision for covering signs belonging to a tenant who has not purchased building coverage under coverage A. Therefore, a tenant with a significant outdoor signs exposure should be advised to cover the signs under coverage A.

 In ISO's Building and Personal Property Coverage Form, the building definition includes personal property used to maintain or service the building. MSO accomplishes essentially the same thing with a personal property extension that lists a nonexhaustive list of examples: "air conditioners; cooking, dishwashing, laundering, refrigeration, and ventilating appliances; fire extinguishers; floor coverings; lawn care and snow removal equipment—including riding mowers and similar items, but not other types of vehicles; outdoor fixtures /furniture."

 Debates can develop over what constitutes "similar items." Restriction of eligibility to property that is used "primarily to maintain or service covered buildings" is also potentially confusing. The verb "to service" is virtually synonymous with "maintain," since its definition is "to repair or maintain." Thus, a literal interpretation of the provision eliminates all of the listed items—fire extinguishers, outdoor furniture, floor coverings, appliances—since none are among items generally used to repair or maintain a building or premises.

 The supplemental coverage form specifically excludes outdoor fixtures because they are automatically included as building property under coverage A.

 4. Building Code/Law Coverage

 Analysis

 This supplemental coverage applies when an ordinance or law regulating the construction or repair of buildings results in increased costs in order for the insured to comply with such ordinance or law. Codes requiring pollutant cleanup are not included. The insurer is not obligated to make any payments under this coverage unless or until the property is repaired as soon as possible.

 The amount that the insurer will pay under this supplemental coverage is limited to 10 percent of the building limit unless a different factor is entered in the declarations. This amount is considered additional insurance, that is, not included in the limit of insurance set in the declarations page for covered buildings. There are also restrictions described in this clause as to when the insurer will not pay for demolition and the increased cost of construction: the property must be repaired or rebuilt at the same premises. Endorsement MCP 522, if triggered in the declarations, will permit reconstruction at another premises.

 Unless endorsement MCP 506 is triggered by an entry in the declarations, this supplemental coverage applies only to buildings that are covered on a replacement cost basis. If a coinsurance penalty applies to the building coverage, it also applies under this supplemental coverage.

 Triggering endorsement MCP 504 extends the business income/extra expense coverages basic period of indemnity to include the time required to comply with applicable building codes or laws.

 5. Collapse – Cause of Loss Options 3 and 5 Only

 Analysis

 When broad form (option 3) or open perils (option 5) coverage is provided, collapse is covered not as a cause of loss, but as a supplemental coverage. Unlike other supplemental coverages, this is not an additional amount of insurance.

 The form's glossary makes it clear that coverage applies only to collapses that are abrupt in nature. The structure must fall down or cave in; sagging or bulging is not considered a collapse. A building or any part of it that is in danger of collapsing does not qualify as a collapse for purposes of this supplemental coverage.

 Even when open perils coverage (option 5) is otherwise provided, the collapse coverage applies on a specified perils basis. Covered causes of loss include the broad causes of loss (option 3) as well as hidden decay or insect damage that an insured did not know of before the collapse; weight of contents, equipment, animals, or people; weight of rain on a roof; or the use of defective materials.

 Coverage is not limited to the collapse of buildings or structures subject to coverage A. However, the damaged property must be covered under the policy, and the damage must be caused by the collapse of some building.

 The distinction between buildings and structures must be considered in analyzing this coverage. Both buildings and structures can be insured under coverage A; in fact, coverage A states that "the general term buildings also includes other sorts of structures." However, the collapse supplemental coverage states that various specific types of nonbuilding structures listed in the supplemental coverage are not covered unless their loss directly results from the collapse of a building or a structural part of a building. Specifically excluded—unless resulting from the collapse of a building–is the collapse of antennas; awnings; beach or diving platforms; decks; docks, piers or wharves; downspouts or gutters; fences; outdoor swimming pools; paved surfaces of any sort; retaining walls; and yard fixtures.

 6. Consequent Loss Coverages (Spoilage)

 Analysis

 The supplemental coverage for spoilage of covered business personal property, such as food in a freezer, is subject to several limitations and exclusions. However, the limits of this supplemental coverage do not apply to spoilage resulting from damage by a covered peril to covered equipment on the described premises.

 Spoilage resulting from an electrical outage or other loss of utility services is covered only when the loss results from damage by a covered peril to the utility's property (not the named insured's property). The basic limit in the supplemental declarations is $1,000; this can be increased by adding another entry, or coverage may be completely eliminated by entering a $0 limit.

 Unless another limit is shown or coverage is deleted by entering a $0 limit, spoilage resulting from a mechanical breakdown is limited to $500 during any twelve-month period, provided the cause of loss was not within the insured's control.

 7. Debris Removal Coverage – Coverages A, B, C

 Analysis

 Because this coverage applies to the removal of debris of a covered loss, it applies to the damage or destruction of covered property by a covered peril. However, coverage is not limited to debris of covered property. It would, therefore, include removing the debris of an airplane that has crashed into a covered building.

 The insurer agrees to apply up to 25 percent (the amount preprinted in the supplementary declarations) or another specified percentage of the limit on covered property toward debris removal expenses. This is not additional insurance. However, the insurer will also pay an additional amount of insurance, up to $5,000 (or other specified amount), if the debris removal expense exceeds this amount, or if the value of the direct property damage plus the cost of debris removal exceeds 125 percent (or other percentage) of the limit applicable to the covered property. The costs of removing downed trees, pollutants, or volcanic ash are not covered.

 Debris removal expenses must be reported to the insurer within 180 days of the covered loss.

 8. Electronic Data Coverage

 Analysis

 The policy promises to replace or restore data that has been damaged or corrupted by damage to covered property by a covered cause of loss. Damage done to data by a hacker or a computer virus is covered as long as the virus was not introduced to the system by an employee or any entity hired by the insured to work on the computer system.

 The limit for this coverage is an annual aggregate of $3,000 that may be modified in the supplemental declarations. If a loss begins in one policy period and extends into another, only the first policy period's limit applies.

 9. Emergency Removal

 Analysis

 The policy covers loss by any direct physical cause to property that has been moved from the insured location because it was in imminent danger of loss or damage by a covered peril. Note that it does not have to be damaged by a covered cause of loss. For example, property is moved because of imminent wildfires. The location where the property is temporarily stored is flooded; this damage is covered. This coverage applies for thirty days. The supplemental declarations do not impose a dollar limit or provide for a modification of the thirty-day coverage period.

 10. Fire Expense Coverages

 Analysis

 The insured's contractual obligations to pay service charges assessed by a fire department are paid up to $2,000, but coverage does not apply to false alarms. The cost to recharge used fire extinguishers is covered up to $5,000. These limits are preprinted in the supplemental declarations, and higher limits may be purchased. No deductible applies.

 11. Newly Acquired Property Coverages

 Analysis

 The form includes newly acquired property coverage applicable to coverage A (building), coverage B (business personal property), and coverage D (loss of use). Except as noted, coverage is automatically provided for up to sixty days from the date acquisition or construction begins, but it does not extend past the end of the policy term. An additional premium for the values reported is charged from the date construction begins or the property is acquired.

 Unless different numbers are shown in the supplemental declarations, newly acquired buildings are covered for 25 percent of the coverage A limit, subject to a maximum of $250,000 at each building. Protection applies to new buildings under construction on the insured's premises and to any buildings at another location that the insured acquires. As to the latter, the new acquisition must be for usage similar to insured buildings or for use as a warehouse.

 Business personal property at acquired locations is insured for 10 percent of the coverage B limit, with a maximum of $100,000 at each location. This extension does not encompass personal property at fairs or exhibitions. There is no restriction that the newly acquired business personal property be intended for similar occupancies or purposes.

 The full coverage B limit applies if the insured is moving business personal property "from a described premises under this policy to a newly described premises under this policy." The "described" requirement presumably means that this extension applies only after the new location has been added to the policy.

 Loss of use, coverage D, applies when a direct covered loss to alterations or additions to described buildings, new buildings, or building materials or supplies associated with a new building delays the start of operations at the described premises. This extension presumably applies to newly acquired buildings only after the new location has been added to and described in the policy. It also applies to business income/extra expense coverages resulting from direct damage to business personal property. Unless different factors or limits are shown, this supplemental coverage is limited to 10 percent of the coverage D limit, subject to a $100,000 maximum; it is not an additional amount of business income/extra expense coverage. The extension is subject to the applicable coinsurance provisions.

 12. Off Premises Coverages

 Analysis

 Covered property temporarily at a location not owned, leased, or operated by the insured is insured up to $5,000 unless another amount is entered in the supplemental declarations. This extension specifically excludes property in or on a vehicle; property in the care, custody, or control of salespersons; and stock.

 The property in transit coverage applies to covered business personal property (other than property in the custody of salespeople), and coverage is limited to a few causes of loss and to a maximum of $1,000 unless a different limit is shown in the supplemental declarations. Open perils coverage is available as an alternative, and this option is triggered by entering "MCP 505″ in the declarations and entering appropriate dollar limits. A separate sublimit, if listed, will apply to theft losses.

 13. Outdoor Property Coverage

 Analysis

 The building coverage applies if any of the named perils of fire, lightning, explosion, riot, civil commotion, or aircraft cause damage to outdoor fences, radio antennas, television antennas, satellite dishes, or trees, shrubs, and plants. The policy does not cover the perils to which these types of property are especially susceptible: weather-related perils, vandalism, and vehicle damage.

 Up to $1,000 applies to the loss, including debris removal expense (no other debris removal coverage is available for trees). As regards trees, shrubs, and plants, payment is restricted to $250 per item. Different limits may be entered in the supplemental declarations.

 14. Personal Property Coverages

 Analysis

 Five extensions modify the types of business personal property to which Coverage B applies but do not add additional amounts of coverage.

 Coverage on creatures is limited to creatures held for sale that are inside a described building at the time of the loss and to creatures owned by others that the insured is boarding (as in a dog kennel). Creatures are not covered against injury, but only when they die or need to be killed because of harm by fire; aircraft; explosion; falling objects; lightning; riot or civil commotion; sinkhole collapse; smoke; sprinkler leakage; vandalism; vehicles; volcanic eruption; water damage; weight of ice, sleet, or snow; or windstorm/hail. Creature is not a term defined in the policy. Generally, creature refers to living things other than plants, a term that would include pets, farm animals, animals found in a zoo, and research specimens of all shapes and sizes.

 Unless a different limit is indicated in the supplemental declarations, $3,000 per occurrence is available for loss or damage to personal effects (i.e., items usually worn or carried on the person) owned by the insured, the insured's directors, officers, partners, employees, or volunteer workers.

 Personal property of others is a much broader category than personal effects. As discussed earlier in this analysis, coverage B covers damage to the personal property of others to the extent of the named insured's labor, materials, and supplies. This supplemental coverage automatically extends coverage B to apply $3,000 (or a different limit, if indicated in the supplemental declarations) to property of others in the insured's care, custody, or control that is used in connection with the insured's business or operations. The insurer has a right to adjust the loss with the property's owners. Personal property of others can also be covered under coverage C.

 If the named insured has a contractual obligation to insure leased personal property owned by others but in its custody—such as a large photocopy machine—this supplemental coverage also extends coverage B to include the insured's contractual obligations for damage by a covered peril. The full coverage B limit includes this category of nonowned personal property, but this extension does not provide any additional limits of insurance.

 Valuable papers coverage applies when business personal property is covered. The $3,000 limit is preprinted in the supplementary declarations may be changed. A $250 deductible is standard, but this is also subject to change either by showing a different deductible amount in the declarations or by entering "MCP 511″ in the declarations. MCP 511 modifies the policy so that the policy's general deductible also applies to valuable papers coverage. Loss must be caused by a covered peril that applies to coverage B. Most limitations and exclusions do not apply to this coverage, but the intentional loss and wear and tear exclusions do apply.

 Coverage B also applies to some vehicles, provided they are customarily kept and operated at the described premises and are not licensed for use on public roads. This category obviously includes riding mowers and snow removal equipment and similar items that can also be covered under the building extension coverages, discussed earlier.

 The vehicles category in this context is broad enough to include canoes and rowboats on shore at the described premises, as well as other types of watercraft, aircraft, other types of self-propelled machines, and trailers that the named insured holds for sale, manufactures, processes, or warehouses. Autos held for sale are specifically excluded.

 Pollution Clean Up Cost Coverage

 15. Pollution Clean Up Cost Coverage – Coverages A, B, C

 Analysis

 An additional coverage—with a separate annual aggregate limit of $10,000 unless the supplemental declarations show a different limit—applies to extract pollutants from land or water on the described premises if the "discharge, dispersal, emission, escape, migration, release or seepage" of pollutants (other than nuclear or radioactive materials)resulted from a covered cause loss.

 Covered expenses must be reported to the insurer within 180 days of the date on which the covered loss occurs. The declarations may show a specific deductible for this coverage.

 16. Precious Metals Coverage – Industrial Operations

 Analysis

 Another section of the policy excludes coverage for gold and other precious metals used in connection with industrial operations other than manufacturing objects made of precious metals. This supplemental coverage specifically covers such precious metals for up to $3,000 or whatever other amount is shown in the supplemental declarations.

 17. Steam Equipment or Other Fired Vessel

 Analysis

 It is most important to recognize that this supplemental coverage does not cover explosions that result from steam pressure. It does, however, cover the explosion of fuel or gas used to fire a steam boiler or a hot water heater or the explosion of a hot water heater or boiler. Damage caused by the operation of a boiler's safety valve is covered when open perils coverage (Option 5) applies. This supplemental coverage extends the types of losses that are covered but has no bearing on the applicable amount of insurance.

 Water Damage

 18. Water Damage/Related Damage Repair Expense Coverage

 Analysis

 As described elsewhere in the policy, coverage under the sprinkler leakage and water damage perils applies to damage to covered property resulting from the abrupt discharge of water. For example, the water might damage a hardwood floor. This supplemental coverage expands coverage to include expenses associated with repairing the leak itself, but it does not provide any additional amount of insurance.

 Coverage applies to the cost of tearing out and replacing part of the building or structure to repair damage to the system or appliance. Coverage also applies to the cost to repair or replace the particular defective or damaged part of the appliance, equipment, or system that the water escaped from. Coverage is limited to the leaking or broken joint, pipe, valve, or item; the insurer will not pay under this coverage to repair the entire appliance, equipment, or system. If the pipes in a plumbing system are badly corroded and one suddenly springs a leak, the insurer will repair the leak but will not pay to replace the entire plumbing system.

 This supplemental coverage does not apply if another party—such as a landlord or a contractor that installed defective plumbing—is legally or contractually obligated to pay for such expenses.

 19. Weather Related Coverage – Cause of Loss Option 5

 Analysis

 This supplementary coverage applies only to buildings and personal property inside a building to which open perils coverage (option 5) applies. It is directed at losses caused by ice dams and similar situations in which water seeps into a building even though the walls and roof are not otherwise damaged. This supplement clarifies what types of losses are covered, but it does not provide additional limits of coverage. Entering "MCP 515″ in the declarations triggers an exclusion for damage to a building's interior elements.

  Part I C – Cause of Loss Options

 General Cause of Loss Conditions – Coverages A, B, C

 Analysis

 Nearly all of Part IC describes the causes of loss that apply to coverages A, B, and C. Different items of property can be covered against loss by different sets of perils; the causes of loss options listed for each property item in the declarations indicate which perils apply to which property items. In some cases, more than one option may apply to a single property item.

 As respects coverages A, B, and C, covered loss must be fortuitous, direct, and physical in nature. Property that is stolen is not necessarily damaged; but it is no longer usable by its owner. The form makes it clear that theft can also result in a covered loss.

 C. Causes of Loss Coverage Options

 Analysis

 Option 1—Fire Coverage provides the very basic fire coverage of the traditional 165-line standard fire policy, which includes explosion and lightning.

 Option 2—Basic Coverage provides basic coverage that includes the same perils as ISO's basic causes of loss form. These include the packages traditionally known as fire, extended coverage (EC), and vandalism or malicious mischief (VMM), plus sinkhole collapse and volcanic eruption. The perils are listed in alphabetical order; those marked with an asterisk are specifically described or defined later in this section of the policy.

 Option 3—Broad Coverage in the MSO form likewise parallels ISO's broad causes of loss broad form and adds—while maintaining alphabetical order—the perils of falling objects, water damage, and weight of ice, sleet, or snow. It also adds glass breakage as a peril. As defined, this peril does not apply to the glass itself but rather to property damaged by broken glass. For example, merchandise inside a store's display window may be damaged if the glass breaks.

 Option 4—Sprinkler Leakage Coverage, may be added to options 1, 2, or 3 when coverage applies to a building with an automatic sprinkler system. If sprinkler leakage is covered, the declarations entry for a sprinklered building with broad form coverage would then show both option 3 and option 4 for that building.

 Option 5—Expanded Coverage provides open perils coverage. The expanded terminology nicely evades troublesome all-risk or risk-of-loss wording while having the same effect. This option specifically includes broad form coverage and sprinkler leakage coverage. Other open perils policies are invariably intended to be at least as broad as broad form policies with respect to the basic and broad forms' specified perils, but failure to be explicit on that point occasionally creates unintended coverage gaps. MSO's expanded coverage specifically includes broad form perils and sprinkler leakage, as well as "direct physical loss to or theft of covered property not otherwise excluded." However, coverage for falling objects and sinkhole collapse is still no broader than that of the broad coverage option.

 Option 6—Provides earthquake coverage, as described in a separate endorsement that is not incorporated within the policy. A common exclusion precludes coverage for earthquake under all causes of loss options, so unless option 6 is activated, earthquake coverage is excluded.

 7. Exclusion Option A – Theft

 Analysis

 Options A, B, C, and D can be used to eliminate theft, vandalism, water damage, and windstorm/hail as covered perils. Mechanically, this is accomplished by adding one or more letters after the option number. So, if the intent is to provide coverage for a specific building against the basic causes of loss other than vandalism, the declarations would show Option 2B as the causes of loss option applicable to that item.

 11. Description of Listed Causes of Loss

 Analysis

 Only the asterisked perils are specifically defined, and the definitions in this form are relatively brief.

 Fire is not defined here, but the peril itself is listed as "Fire (hostile fire)." The courts have long interpreted the standard fire policy as covering only hostile fire, which is a fire that is out of bounds. For example, a fire within a furnace or stove fire box is considered friendly, and loss arising from it typically has not been held to be covered. For example, personal property that is burned in a trash fire would not typically be considered covered for the fire damage to it. However, when the fire escapes its normal boundaries—such as when flames jump from a campfire to a forest or buildings—it is transformed into a hostile fire and resulting damage to covered property typically is covered.

 Although explosion is also not defined, the coverage for damage caused by explosion is narrowed through the explosion of steam equipment exclusion, discussed later.

 In addition to physical contact with an aircraft or vehicle, including a spacecraft or self-propelled missile, the aircraft cause of loss applies specifically to objects falling from aircraft.

 Loss or damage caused by falling objects to personal property outdoors is not covered. Another exception to the falling objects cause of loss precludes coverage for personal property within a structure or the interior of the structure itself unless the roof or an outside wall is first damaged by a falling object. Under this exception, there would be no coverage for damage to personal property located within a manufacturing plant if, for example, a piece of steel being lifted by an indoor crane were dropped and crushed the personal property. In that instance, even though the piece of steel can be considered a falling object, the steel did not pierce a hole in the roof or an outside wall on its way down.

 The glass breakage coverage applies to property other than the glass that is damaged by broken building glass.

 Acts of striking employees occupying the described premises are covered under the riot or civil commotion cause of loss, as is looting at the time and place of a riot or civil commotion.

 The form clarifies that sinkhole collapse coverage does not include those instances where the ground sinks or collapses into manmade cavities in the earth. This exposure is more appropriately the subject of mine subsidence coverage. The cost of filling sinkholes is not covered.

 Abrupt, accidental damage to covered property by smoke is covered. To clarify this and other uses of the term, the form states that abrupt makes it clear that an abrupt event is instantaneous—"not gradual, ongoing, or repeated over time." Other property policies make it a point to exclude smoke damage from agricultural smudging or industrial operations. The MSO form accomplishes the same effect in a separate exclusion discussed later.

 When applicable, sprinkler leakage coverage is for damage caused by the leakage or discharge from an automatic sprinkler system, including the collapse of the system's tank if there is one. Automatic sprinkler system is defined in the form's glossary. It refers to an "automatic fire protection or extinguishing system" and includes sprinklers, nozzles, ducts, pipes, valves, fittings, tanks, pumps, and private fire protection mains. It also includes nonautomatic systems, hydrants, standpipes, and outlets supplied from an automatic system.

 Vandalism is generally a covered peril, but as mentioned earlier, it can be excluded with cause of loss option B. Vandalism involves willful and malicious damage to or destruction of the insured property. Building damage caused by the break-in or exit of burglars is covered, but breakage of building glass and other loss caused by or resulting from theft is excluded under this peril.

 Damage caused by direct physical contact with a vehicle is covered, but loss caused by vehicles owned by the named insured or by vehicles operated in the course of the named insured's business is excluded. Because of this exception, damage caused to an insured's building when a customer backs into the loading dock would be covered. However, if an employee driving a company-owned delivery van has the same accident, neither the basic nor the broad causes of loss forms would pay for the damage to the building.

 The volcanic action peril includes damage from the above-ground effects of a volcanic eruption—airborne blast and shock waves, ash, dust, particulate matter, and lava flow. It does not include the seismic effects of a volcanic eruption, as detailed in one of the form's common exclusions.

 All volcanic eruptions occurring within a seven-day period (168 hours) is considered a single occurrence. No provision is made for modifying this time period.

 Coverage under the water damage peril applies to damage to covered property resulting from the abrupt discharge of water—including steam. For example, the water might damage a hardwood floor. A supplemental coverage discussed earlier expands coverage to include expenses associated with repairing the leak itself.

 Specified Causes of Loss

 D. Specified Causes of Loss

 Analysis

 A definition clarifies which perils are included in the specified causes of loss that apply to some of the form's supplemental coverages. The perils are merely named in this definition, but the preceding descriptions or definitions provide any necessary elaboration.

 E. Covered Loss

 Analysis

 The preceding causes of loss options involved direct damage to buildings, structures, and personal property covered under coverages A, B, and C. As described elsewhere, coverage D provides indirect loss coverage when a business income and/or extra expense loss results as the consequence of a direct covered loss.

 Part I D – Property Exclusions/Limitations

 We do not cover the following property or loss except to the extent otherwise specifically provided for in this policy.

 Analysis

 Some types of property or losses excluded in this section of the policy are not covered at all. Others are excluded from the policy's full coverage because one of the form's supplemental coverages provides more limited or focused coverage. The first section of exclusions applies to all coverages, A, B, C, and D.

 Building glass is not covered property except to the extent it is covered under the glass extension, discussed earlier, where it is subject to a sublimit except for damage by one of the specified causes of loss other than vandalism.

 Crops, even harvested crops, are not covered at all. It seems questions could arise, in some circumstances, as to whether a bin full of wheat or a storeroom full of apples contains an excluded crop or covered stock.

 Land and water are not covered property. Neither is generally susceptible to the causes of loss that a property insurance policy is designed to cover.

 Other policy provisions attempt to limit coverage to described buildings, premises, locations, or operations or to covered property. An exclusion underscores this intent by specifically stating that coverage does not apply to property that is not described in the policy.

 There is no coverage at all for personal property that is also the subject of other, more specific, insurance. However, the building coverage (coverage A) applies as excess over other more specific insurance. For example, an expensive piece of specialized machinery is insured with the building if permanently installed. If the insured has purchased other insurance identifying the machine and insuring it separately, then the machine is more specifically covered by the other contract. This form will pick up the difference, if any, between the insured's loss and the recovery under the other contract.

 Certain types of outdoor property are covered by supplemental coverage 13, where coverage is subject to sublimits and coverage is limited to certain perils. Outdoor signs, likewise, are addressed under supplemental coverage 3.B.

 Vehicles and their equipment should generally be covered under an auto, watercraft, aircraft, or inland marine policy such as a contractors equipment floater. However, supplemental coverage 14.E. extends coverage B to apply to certain types of vehicles.

 2. Coverage A

 Analysis

 Certain types of property that might qualify as buildings or structures are excluded from coverage because they are not especially susceptible to damage by most of the perils that the policy covers. Because these items are not covered property, they also are not included in any coinsurance computations.

 3.Coverages B and C

 Analysis

 Another set of excluded property and losses applies to business personal property of the insured and personal property of others. Creatures, money and securities, electronic data, precious metals, and valuable papers are not covered under coverages A and B, but they are covered to a limited extent by supplemental coverages.

 Precious metals are not covered under coverages A and B. However, precious metals used in industrial operations are covered, subject to a sublimit, by supplemental coverage 16. Precious metals used in jewelry or used to make jewelry are covered—but only for loss by theft and even then only when open perils (option 5) coverage is provided. A standard $100 per item, $3,000 per loss limit applies (unless it is modified in the supplemental declarations) In short, the only coverage available on precious metals used in jewelry applies to theft (not fire or other perils) of items worth more than $100 (or other indicated sublimit) and then only up to $3,000 (or other indicated aggregate limit). Other jewelry-type property is covered subject to coverage B limits except that loss by theft is limited to $3000 per loss or $100 per item, and individual items with a retail value of less than the per-item limit (e.g., $100) are not covered at all.

 Theft of furs is subject to a $3,000 per occurrence limit unless a different amount is indicated. The word aggregate is not used here in its usual sense. The form characterizes the $3,000 (unless modified) limits on jewelry and furs as "aggregate limits for all described property per occurrence." In other words, these are per-occurrence limits, not annual aggregate limits.

 Item D. of this exclusion states that personal property is not covered at all under coverages A and B while it is airborne or waterborne. Coverages A and B apply to on-premises property. Although it is not mentioned at this point in the form, the off-premises supplemental coverage does apply to property in transit on a motor vehicle that the named insured leases, operates, or owns. Motor vehicle is not defined, but supplemental coverage 14.E. suggests that aircraft and watercraft, as well as cars and trucks, are vehicles. In summary, personal property is not covered if it is airborne (in a tethered balloon?) or waterborne on the premises, but it could arguably be covered—subject to limitations or restrictions—away from the premises.

 Part I E Property Loss Limitations

 We do not provide insurance under Part I for any sort of damage or loss directly or indirectly, wholly or partially, aggravated by, consisting of, or resulting from the following – even if loss otherwise covered contributes to such concurrently or in any sequence. The following exclusions and limitations of loss in connection with certain property apply to the extent that the subject loss and property are otherwise covered under this policy.

 Analysis

 This set of provisions does not apply to the accounts receivable or valuable papers supplemental coverages.

 The title of this set of provisions contains the phrase "loss limitations"; the "exclusions and limitations" in this provision are not a list of excluded perils or a list of types of property that are not covered. Rather, they are characterized as provisions that apply in connection with certain property to the extent the loss and property are otherwise covered. In other words, these exclusions and limitations apply to losses that would otherwise be covered.

 These provisions are not limited to any particular property coverage(s), so they apply not only to direct damage to buildings and personal property but also to loss of use and to the form's supplemental coverages. Most of the exclusions or limitations here relate to losses that can be minimized or mitigated with the use of sound loss control.

 Direct damage or loss of use to builders' equipment, machinery, and tools away from the premises are excluded. These items are highly susceptible to loss, and they can more specifically be addressed with a contractors equipment floater.

 Building materials that are not yet incorporated in the building are attractive to thieves, and the theft exposure is best addressed through loss control measures rather than insurance. This exclusion also impacts the loss of use coverage, since theft of critical building materials can seriously delay completion of a construction project.

 Insurance practitioners commonly use the term mysterious disappearance to apply to property that has disappeared when theft is suspected, but it cannot be proven. The disappearance of property limitation makes it clear that disappearance is not a covered cause of loss. Voluntary parting with or transfer of property likewise is not covered, even if theft is involved.

 Fragile items by definition are easily broken, and such breakage is excluded unless the breakage is caused by one of the specified causes of loss as defined: fire; aircraft; explosion; falling objects; lightning; riot or civil commotion; sinkhole collapse; smoke; sprinkler leakage; vandalism; vehicles; volcanic eruption; water damage; weight of ice, sleet, or snow; windstorm/hail. Including falling objects in this list seems like a loophole until one looks at the description of falling objects and realizes that coverage applies to property damaged by the falling object, not to the fallen object itself.

 Damage caused by internal conditions to hot water or steam boilers is covered only to the extent that supplemental coverage 17 applies.

 Part I F – Losses Not Insured

 We do not provide insurance under Part I for any sort of loss directly or indirectly, wholly or partially, aggravated by, consisting of, or resulting from the following – even if loss otherwise covered contributes to such concurrently or in any sequence.

 Analysis

 Except for the intentional loss and wear-and-tear exclusions, this set of provisions—which is sequenced in alphabetical order—does not apply to the accounts receivable or valuable papers supplemental coverages.

 The lead-in language to this set of provisions closely resembles the lead-in to the property loss limitations. One difference is that this section does not refer to "damage or loss" but only to "loss." Also, it omits the sentence that says the provisions apply "to the extent that the subject loss and property are otherwise covered." Taken together, these differences indicate that the exclusions in this set of provisions describe losses that are not insured at all. However, that is not necessarily the case. Some of these exclusions do not apply to certain supplemental coverages, some relate to losses that are covered in some manner by a supplemental coverage, and others provide coverage for ensuing losses.

 The computer hacking or computer viruses exclusion deals with defined terms whose definitions contain no surprises. What is noteworthy is that this exclusion does not apply to the supplemental electronic data coverage. The exclusion can also be deleted with respect to the electronic media—special period of indemnity provision that applies to business income/extra expense coverage.

 Delay of market and other consequential losses are not covered unless and to the extent business income/extra expense and the spoilage supplemental coverage apply. Same here.

As is customary with property insurance policies, this one excludes employee dishonesty. That exposure is best covered under a fidelity bonds or crime insurance forms specifically designed to cover theft by employees.

 Virtually all property insurance policies—including option 1 under this policy–cover loss by lightning, a form of naturally generated electrical current. Loss by short circuits, brownouts, or electrical or electronic malfunction is not covered unless it leads to an ensuing fire.

 In conjunction with supplemental coverage 17, this policy excludes explosions caused by steam pressure but covers combustion explosions.

 6.Flood/Flooding Exclusion

 Analysis

 Although the provisions in this section of the policy appear in alphabetical order, the flood/flooding exclusion is best understood when it is read together with the water damage exclusion. Taken together, these provisions are designed to preclude coverage for flooding loss caused by surface waters and for underground, subsurface water or pressure it might cause, while preserving loss for ensuing fire, explosion, or theft (when the policy covers theft). The water damage exclusion also precludes coverage for sewer backups, but this exclusion can be eliminated by triggering endorsement MCP 507 with an entry in the declarations. Sprinkler leakage ensuing from subsurface water or sewer backups is covered.

Freezing resulting from the insured's negligence is excluded, as are losses intentionally caused by any insured (including insureds that are not a named insured).

 Ordinance or law coverage and loss of utility services occurring away from the described premises are excluded unless the designated Supplemental Coverage provides coverage.

 12.Wear, Tear, and Other Specified Loss/Cause of Loss Exclusions

 Analysis

 Property insurance policies generally include a group of exclusions typically referred to as wear-and-tear or maintenance exclusions. MSO's wear-and-tear exclusion is unusual in that pollution and mold exclusions are buried within the long list that begins with "wear and tear." Pollution cleanup costs are available in a supplemental coverage.

 An earth movement exclusion is separately enumerated with a cross-reference to the common exclusion for earthquake/earth movement/volcanic action.

 The smoke peril definition, which applies to abrupt losses, is supplemented by a provision that specifically precludes coverage for smoke—and for smog or vapor—from agricultural or industrial activities.

 13.Weather/Related Exclusions

 Analysis

 The weather-related exclusions restrict—or further define—coverage for certain perils. However, the restrictions vary depending on the applicable causes of loss option.

 With options 2 and 3 (basic and broad form perils), windstorm/hail losses are covered without further definition or description. The weather-related exclusion restricts the hail cover by making it clear that cold, frost, ice, sleet, and snow—with or without wind—still are not covered under the windstorm/hail peril. Neither is damage caused by the weight of hail, ice, sleet, or snow to personal property outdoors.

 With basic, broad, or open perils (options 2, 3, and 5), weather-related damage to interior property is limited to instances in which the building's roof or walls have first been breached. However, a supplemental coverage covers damage from thawing caused by ice dams and similar situations when option 5 (the open perils approach) applies to the damaged property. Unless an otherwise covered ensuing loss occurs (such as a fire), even open perils option 5 does not cover loss of certain enumerated weather-related types.

 Part I G – Special Part I Conditions

 1.Duties When Loss/Danger of Loss Occurs You, other insureds, and other coverage beneficiaries must do all of the following things:

 Analysis

 This form imposes the usual duties on parties who have suffered a property loss. These duties are not to be taken lightly, which is why this set of provisions concludes by stating in bold face print that failure to comply with these conditions can alter or void the insurer's obligations.

 The lead-in sentence makes it clear that these duties apply not only to the named insured but also to other insureds and other coverage beneficiaries. The latter category would apply primarily to personal property of others. Recall that the insurer has a right to settle such losses directly with the property owner.

 2.How Losses Are Settled

Analysis

 Most building and personal property losses are valued on an actual cash value basis. Replacement cost coverage can be substituted for actual cash value coverage by entering "MCP 520″ in the declarations for each item to be valued on a replacement cost basis. Actual cash value and replacement cost are described in more detail later in this section of the form.

 The insurer will not pay more than the reasonable cost of repairing, restoring, or replacing damaged property. If the insured pays more than that reasonable cost or adds an upgrade, the insurer is not obligated to pay the extra amount. On the other hand, if the insured completes repairs for a lesser amount, the insurer will not pay more than the amount that is actually paid. The insurer (not the insured) is entitled to benefit from any negotiations that reduce the actual repair cost.

 Of course, the insurer will not pay more than the amount of insurance applicable to the damaged property, nor will the insurer pay any amount that exceeds the extent of the named insured's insurable interest in the property unless another party with an insurable interest in the property is also named in the form.

 Special valuation provisions apply to some types of property, even though they may be components of the building or tangible personal property.

 A unique characteristic of glass is that ordinances may require that glass in certain locations, such as doors or shower stalls, must be replaced with safety glass even if the original glass was not safety glass. The insurer will pay the extra cost to replace broken ordinary glass with safety glass if necessary. However, glass coverage is still subject to the sublimits shown in the supplemental declarations.

 U. S. money, if it is covered at all, is valued at its face value. The value of foreign currency and securities fluctuates, so to eliminate disputes, foreign money (if covered) is valued at its exchange rate, and securities (if covered) on their market value at the close of business on the date the loss is reported to the insurer.

 A selling price clause (not labeled as such in this form) values sold-but-not-delivered stock at its net selling price.

 The valuation of tenants' improvements and betterments was discussed earlier in connection with coverage B.

 Valuable papers and records not subject to the supplemental coverage are valued on the cost of blank materials and the cost of copying any duplicates of the damaged records. In most cases the cost of blank materials is nominal compared to the value of the intellectual property contained in those records, and the cost of downloading backup data or photocopying duplicate paper records is also nominal.

 B.Limit of Liability per Loss Occurrence – Coverage D Our maximum liability is determined based on consideration of all the following:

 Analysis

 In the Coverage D insuring agreement, the insurer may agree to cover a loss of business income. The provisions here include a nonexhaustive list of factors the insurer will consider when determining the maximum amount of the business income loss for which the insurer is liable, including those associated with the insured's post-loss duties. The insurer's liability is reduced to the extent the named insured can resume normal operations in whole or in part. The word can indicates that the insurer's obligations are reduced even if the insured fails to resume partial operations when it is possible to do so.

 If the insurer provides extra expense coverage in coverage D, the loss adjustment takes into account whatever extraordinary expenses are incurred to maintain operations. If business income coverage is provided, the insurer also takes into account any expenses incurred to reduce the business income loss.

 Extra expenses often involve acquiring equipment or other tangible property for use during the period of interruption. This is not a license to acquire property at the insurer's expense. If the property has any value after it has served its purpose, the insurer is entitled to reduce its obligations by that amount—referred to here as the property's salvage value. In this context, the salvage might be nearly new property, not scrap. The form does not say the insurer takes ownership of the salvage, merely that the insurer's liability is reduced by the value of the salvage.

 The insurer's obligations are also reduced by any recovery from other type of insurance. If another party caused the insured's property loss, this might include recoveries from a third party's liability insurance. As with business income coverage, the insurer's obligations are reduced to the extent normal operations can be resumed.

 The insurer's obligations do not exceed the dollar limits for business income and/or extra expense coverage at each location, as shown in the declarations.

 C.Bases of Loss Settlement – Coverages A, B, C

 Analysis

 Unless otherwise specified, buildings and business personal property of the named insured are valued on an actual cash value basis. As defined in the form's glossary, the insurer may consider the following factors in determining an item's actual cash value: "age; condition; cost to repair, replace, or restore the property, subject to deduction for depreciation; deterioration; economic value; market value; obsolescence (both structural and functional); original cost; use; utility; or other circumstances that may reasonably affect value."

 As is commonly done in forms that cover buildings, the form also specifies that smaller losses to building property (with some exceptions) are to be settled on a replacement cost basis. In this case, the cut-off point for smaller losses is the replacement threshold limit stated in the supplemental declarations. The standard replacement threshold limit is $3,000, but this is subject to modification. Replacement cost coverage does not apply to these building items that tend to depreciate rapidly: awnings; cooking, dishwashing, laundering, refrigerating, or ventilating appliances; fire extinguishers; floor coverings; lawn care and snow removal equipment; or outdoor fixtures/furniture.

 Replacement cost coverage replaces the standard actual cash value coverage for items for which MCP 520 is listed in the declarations. A statement in the declarations may also indicate that replacement cost coverage is applicable. Even when replacement cost coverage applies, certain hard-to-value or irreplaceable items are valued on an actual cash value basis: manuscripts, property of others, and antiques or works of art. Stock is also valued at actual cash value unless the selling price option (MCP 521) applies to stock that has been sold but not delivered.

 Replacement cost coverage applies only when the property is actually repaired, replaced, or restored. An insured has the option of settling on an actual cash value basis and then 180 days to submit a claim for the difference between the actual cash value and the replacement cost of repairs that have actually been completed. As discussed earlier, the same limitation applies to additional ordinance or law costs incurred under supplemental coverage 4. The policy is silent as to what happens if repairs take longer than 180 days. In contrast, the ISO Building and Personal Property Coverage Form provides 180 days for the insured to notify the insurer of its intent to make a replacement cost claim once restoration is completed, but it does not limit payment to work that is completed within 180 days.

 Repair, replacement, or restoration of the damaged property must be made at the same location unless the declarations include MCP 522 with respect to the property.

 The described appraisal process may be used in settling disputes over the amount of any loss under either the main coverages or the supplemental coverages. The appraisal condition provides that if either the insurance company or the insured submits a written demand for an appraisal after a property loss, each has thirty days to choose an appraiser and the two appraisers, in turn, have fifteen days in which to select an umpire. In the event the appraisers fail to agree on both the value of the property and the amount of loss, the issue is given to the umpire (previously selected by the two appraisers or appointed by a judge from any court having jurisdiction). When an agreement is reached by any two of these parties (among the appraisers and umpire), the decision stands. Any expenses beyond the cost of each party's appraiser are divided equally between the insurance company and the insured. It is stated within the appraisal provision that the insurance company may still deny a claim even if an appraisal has been agreed to. The purpose of the statement is to avoid a legal argument that the insurer's participation in the appraisal process carries an implied agreement to pay that prevents subsequent denial.

 E.Coinsurance Requirements – Coverages A, B, C When the Declarations show a Coinsurance factor, the following Conditions apply:

 Analysis

 As respects buildings and personal property, MSO's two-part coinsurance provision is laudably concise and clear. A coinsurance factor (typically 0.80, 0.90, or 1.00) is shown in the declarations for each building or personal property item. Full liability—meaning no coinsurance penalty—is applied if the amount of insurance equals or exceeds the coinsurance factor times the insurable value of the damaged, destroyed, or lost property at the time of the loss. Reduced liability—application of a coinsurance penalty—applies when the amount of insurance does not meet this standard. With reduced liability, the insurer's obligation is prorated in proportion to the ratio of the insurance limit to the amount of insurance that should have been carried to meet the coinsurance requirement.

 To illustrate, suppose property with an insurable value of $100,000 is insured subject to a $60,000 limit under a policy with a 0.80 factor (also known as an 80 percent coinsurance clause). Applying the calculations described in the form, a is equal to $100,000 and b is 0.80. The product of a times b is $80,000. Because $80,000 exceeds (is larger than) the $60,000 limit, the insurer's maximum obligation is reduced. Full liability does not apply; reduced liability does.

 To determine the insurer's reduced liability, first divide the applicable limit ($60,000 in the example) by the $80,000 figure previously determined by multiplying a times b. $60,000/$80,000 = .75, or 75 percent. The insurer's reduced liability is 75 percent of the amount of the loss minus the deductible. If the amount of the loss is $11,000 and a $1,000 deductible applies, first subtract the $1,000 deductible from the $11,000 loss ($11,000-$1,000 = $10,000). Then multiply $10,000 by .75 to determine the insurer's reduced liability of $7,500.

 Unless otherwise stated, the coinsurance condition applies only to coverages A, B, and C; it does not apply to this form's supplemental coverages.

 F.Coinsurance Requirements – Coverage D.1

 Analysis

 As respects business income coverage, MSO's two-part coinsurance condition parallels the approach taken with respect to buildings and personal property. However, it can be more difficult to establish business income values than it is to determine the insurable value of tangible property.

 Calculations begin by determining the net income and operating expenses that would have been earned during the current twelve-month policy period if no direct covered loss had occurred at some point during the policy period. This amount, referred to as "a," is then multiplied by the coinsurance factor specified in the policy, referred to as "b." If the amount of business income insurance equals or exceeds the product of a times b, the insurer has full liability and will pay the business income loss in full, subject to policy terms and conditions.

 Reduced liability applies when the amount of insurance is less than the amount previously determined, in which case the amount of the loss is prorated in proportion to the amount of insurance that should have been carried.

 To illustrate, suppose the insured's net income and operating expenses during the current twelve-month policy term would have been $100,000, and the insured has business income coverage (coverage D.1.) subject to a $60,000 limit under a policy with a 0.80 factor (also known as an 80 percent coinsurance clause). Applying the calculations described in the form, a is equal to $100,000 and b is 0.80. The product of a times b is $80,000. Because $80,000 exceeds (is larger than) the $60,000 limit, the insurer's maximum obligation is reduced. Full liability does not apply; reduced liability does.

 To determine the insurer's reduced liability, first divide the applicable limit ($60,000 in the example) by the $80,000 figure previously determined by multiplying a times b. $60,000/$80,000 = .75 or 75 percent. The insurer's reduced liability is 75 percent of the amount of the loss minus the deductible. (No dollar deductible applies to business income coverage.) If the amount of the business income loss is $10,000, multiply $10,000 by .75 to determine the insurer's reduced liability of $7,500.

 The coinsurance condition is waived (that is, no coinsurance penalty applies) for smaller business income losses. The supplemental declarations include a dollar limit ($10,000 is standard but can be modified) and a factor (0.05 is standard but can be modified) that apply in determining which losses this applies to. The coinsurance penalty is waived for losses that meet both of two conditions. First, the amount of the covered business income loss must be less than the dollar limit (e.g., $10,000), and second it must be less than the factor (e.g., 0.05) times the applicable amount of insurance. In the preceding example, the coinsurance penalty would not apply to any loss that is less than $3,000 if the standard amounts in the supplemental declarations apply. That's because 0.05 (the factor) times $60,000 limit equals $3,000, which is also less than $10,000.

 G.Deductible – Coverages A, B, C

 Analysis

 The deductibles discussed here apply only to building and personal property coverage; no dollar deductible applies to business income or extra expense coverage. The applicable deductible amount appears in the declarations. The insurer has no obligation with respect to any loss that is less than the deductible, and the deductible is subtracted from larger losses.

 When coinsurance and deductibles are involved, questions arise as to where in the sequence the deductible is applied. When a coinsurance penalty (reduced liability) is involved, the deductible in this form is to be subtracted from the amount of the loss, not the amount of the recovery. This approach was illustrated in the coinsurance example provided earlier.

 MCP 512 offers a disappearing deductible option. Disappearing deductibles are attractive—in theory—but they have all but disappeared in practice. Property insurance deductibles are intended to encourage loss prevention, by ensuring that the insured has some skin in the game, and to eliminate the disproportionately high cost of settling small claims that are more efficiently handled outside the insurance mechanism. These objectives are most relevant to small losses. Disappearing deductibles apply to small losses but gradually become smaller, and eventually disappear, as the size of the loss increases. Disappearing deductibles are theoretically appealing because they meet the objectives of a deductible with respect to small losses without penalizing the insured who suffers a larger loss. Unfortunately, they are difficult to explain and often misunderstood by insureds.

 H. Loss to a Portion of a Pair or Set of Articles – Coverages B/C

 Analysis

 Loss to one item that is part of a pair or set of related items (for example, the second volume of a three-volume book set) often disproportionately affects the value of the remaining items. This form's pair or set clause makes it clear that loss of one component does not automatically create a total loss but, if the insurer agrees to pay for a total loss, the insurer is entitled to take possession of the remaining parts.

 It should go without saying, but the form makes it clear that the insured is on its own to the extent any loss is not covered by this policy. The insurer has no obligation to pursue other sources of recovery.

 J.Our Options in Settling Losses – Coverages A, B, C

 Analysis

 Following a covered loss, the insurance company has four options. First—and most commonly—the insurer will simply provide money to pay the loss. Second, the insurer may repair or replace the property. For example, the insurer might arrange to have a glass contractor, with whom it does business, to replace damaged glass. Third, the company may take the property and pay the insured an agreed or appraised price. The insurer promises to notify the insured within thirty days of receipt of the sworn statement of loss if it intends to pursue this option. Finally, the company may settle the claim with the named insured, any named loss payee, or any other party legally entitled to payment—such as the owner of personal property of others.

 Claims involving a loss payee or personal property of others in the insured's custody occasionally give rise to a legal action against the insured. When this happens, the insurer has a right to conduct and control a defense, at the insurer's expense, but defense costs are within applicable limits.

 K.Recovery of Covered Property

 Analysis

 This condition provides a method for loss readjustment in case damaged or stolen property is recovered after the insurer has paid a claim. The insured has the option to return the amount of any claim payment in return for the original item, in which case the insurer is to be compensated. Alternatively, the insured may keep the claims payment, but the recovered property then belongs to the insurer.

 L.When Loss Becomes Payable/Payment to Others

 Analysis

 The insurer must pay the claim within thirty days after reaching an agreement with the involved parties. The insurer has a right to decide whether the claim draft is payable to the insured, or it may be payable jointly to all interested parties. This is normally done by naming the various parties and adding "as their interests may appear." The insured may assign claims proceeds to another party, but the insurer will not pay the other party without the insured's consent. The insurer may settle a claim with a trustee who represents other interested parties.

 The policy's limits are not aggregate limits, so payment of any claim does not reduce the amount that is still available to pay future claims.

 3.Other Special Part I Conditions

 Analysis

 The insured may not simply abandon damaged property to the insurance company.

 An increase in hazard condition was a standard fixture in the 1943 Standard Fire Policy that once served as the foundation document for commercial property insurance. However, insurers have found it difficult to enforce this condition. Today, few policies include an increase in hazard condition per se.

 Vacancy and unoccupancy represent an increase in hazard. A vacant building does not contain the contents that are customary to its occupancy, but a building under construction is not considered vacant. Coverage is suspended completely when a building is vacant or unoccupied for more than sixty consecutive days. However, this condition does not apply to a seasonal building that is normally closed during part of a year.

 Because it completely suspends coverage, this condition is harsher than the vacancy condition in the ISO Building and Personal Property Coverage Form, which eliminates coverage for certain perils and reduces the amount of recovery for loss by other perils when a building is vacant for more than sixty days.

 C.Mortgagee Agreement

 Analysis

 This condition spells out the rights and duties of any mortgagees or trustees (here referred to as mortgageholders) that are named on the declaration and comply with certain conditions.

 The mortgageholder is required to notify the insurance company of any known change in ownership or occupancy, as well as any foreclosure proceeding or increase of hazard. On the insurer's demand, the mortgageholder is also required to pay any required premium that the insured has not paid and to furnish a proof of loss, within sixty days, if the insured has not.

 If claim payment is made to a mortgageholder, the insurance company inherits the mortgageholder's rights of recovery against a third party who may be responsible for the loss, but the mortgageholder still retains a right to recover the full amount of the claim.

 At the insurance company's option, the mortgageholder may be paid the full payment of the principal and interest on the mortgage in exchange for transfer of the mortgage to the insurance company. The insured continues mortgage payments, but to the insurance company instead of the original mortgageholder.

 If payment for a claim is denied to an insured (due to the insured's actions or lack of compliance with the terms for coverage) a mortgage holder is still entitled to loss payment as long as any obligations concerning premium or proof of loss due to the company are taken care of by the mortgageholder.

 D.No Benefit to Bailee

 Analysis

 Like many other property insurance forms, this policy will not cover the liability of a bailee for property that is in the bailee's possession.

 Part I H – Glossary

 The following words shown in italics are defined for the purposes of insurance under Part I to mean the following.

 Analysis

 Italicized terms and phrases elsewhere in the form have the meanings defined in this glossary. If a liability form is Part II of this policy, these definitions apply only to Part I—the property coverages.

 Many of the defined terms are discussed elsewhere in this analysis. Others, though they are important, contain no surprises and require no elaboration.

 Part I – Common Conditions

 These Common Conditions Apply in Addition to Part I G.

 1.Action or Suit against Us

 Analysis

 If the insured wishes to sue the insurer, the insured must comply with conditions expressed elsewhere in the policy or in a state-specific endorsement. Typically, the insured must first be in full compliance with the terms of the policy, and the action must be brought within a specified time period, such as one or two years, following the loss or damage.

 2.Assignment of Your Interest

 Analysis

 The insurer's written consent is required for any transfer to another person of the insured's rights and duties under the policy. The single exception to this requirement of written consent is transfer to a legal representative upon the death of an individual named insured. In such cases, the legal representative exercises the deceased insured's rights and duties while acting as legal representative. Until a legal representative is appointed, rights and duties of the deceased insured with respect to the deceased insured's property pass to anyone having proper temporary custody of that property.

 3.Cancellation/Termination

 Analysis

 Either the insurer or the insured may cancel the policy. Dealings between insurer and insured with respect to cancellation are to be carried out by "the first Named Insured shown in the Declarations" when more than one insured is named in the policy. It is the first named insured—not any insured—who must mail or deliver notice of cancellation to the insurer. Premium refund is also made to the first named insured.

 The policy automatically terminates if the named insured purchases a replacement policy from another insurer and does not pay the premium on this policy when it becomes due. If the business or premises are sold, coverage automatically terminates at the time title is transferred unless the named insured retains an insurable interest in the property.

 Whether the insured or the insurer cancels the policy, return premium is calculated on a pro rata basis, but the insurer may retain a minimum earned premium.

 Insurers' cancellation, termination, and nonrenewal rights vary by state. Unless otherwise described in this policy, the insurer's rights are described in a state-specific endorsement.

 4.Concealment/Misrepresentation/Fraud

 Analysis

 This provision voids coverage should the named insured commit a fraudulent act or if the named insured or any other insured commits fraud or intentionally conceals or misrepresents a material fact about the coverage, the covered property, a claim, the named insured's interest in the property, or any other aspect of this insurance. Note that the concealment, misrepresentation, or fraud condition works to void coverage whether the fraud, concealment, or misrepresentation occurs before or after a loss.

 The language does not state that the act of any other insured voids the policy only as to that individual. Conceivably, therefore, the act of any insured could void the policy as to all other insureds, including the named insured. However, the insurer may choose to honor the contract with respect to insureds other than the one who was personally guilty of concealment, misrepresentation, or fraud. In some jurisdictions or situations, the insurer may be required to provide coverage for a battered spouse or other innocent coinsured.

 5.Conformity with Statute

 To be covered under the commercial property policy, loss or damage must occur within the coverage territory: the fifty United States (including its territories and possessions), Washington D.C., Canada, and Puerto Rico. The U.S. Government lists the following territories and possessions: the Northern Mariana Islands, Guam, American Samoa, Federated States of Micronesia, U.S. Virgin Islands, Midway Islands, Republic of the Marshall Islands, and Republic of Palau.

 7.Examination/Changes

 Analysis

 This provision underscores the point that one should not assume an insurance provision's contents based on its title. Based on experience with other insurance policies' changes provisions, one might expect from the title of this provision that it explains that policy changes may be made only by the insurer and then only in writing. Not so; that issue is addressed in condition 14. Condition 7 deals with the insurer's right to conduct inspections and to examine the insured's books and records.

 This condition gives the insurer the right (but does not impose any obligation) to conduct inspections, to make surveys, and to make recommendations. The nature of these recommendations is not specified, but recommendations made to the insured typically deal with safety or compliance issues. This condition does not place the insurer (or any rating, advisory, or similar organization making inspections under the policy) in the position of warranting that conditions connected with the insured's operations are safe or healthful or that the insured is in compliance with legal requirements that may pertain to those operations.

 This condition also gives the insurer the right to audit books and records of the insured relating to the policy. The examination or audit may be made during the policy period or any time within three years after the policy period ends. The insurer may make premium adjustments based on the inspection and audit. This condition is linked to the premiums condition that appears later in the form's alphabetical sequence. The premiums condition allows the insurer to charge a provisional premium if MCP 550 is listed in the declarations, with a final premium, retroactive to policy inception, based on a rating inspection or investigation of the insured premises.

 MSO conducts detailed property inspections on every nonresidential risk to develop specific rates for the building and its contents. The specific fire rate reflects the unique circumstances surrounding the individual risk, including building construction, operational hazards, and distance to the fire department and hydrants. In addition to the schedule rate, MSO develops an idealized rate that would apply if all correctable hazards were eliminated. For insureds that may not want or are not able to address all recommendations, MSO will develop tentative rates that show what the rate will be if some of the recommendations are complied with.

 8.Insurance under More Than One Coverage

 Analysis

 This anti-stacking provision prevents the insured from duplicate coverage.

 Insurers periodically introduce new policy editions that contain some changes. Any broadening of coverage produced by a revision of the coverage form that is introduced during the policy period or in the forty-five days preceding its inception will immediately apply to the insured's unrevised policy. However, the liberalization clause does not apply if the revision that broadens coverage also includes coverage restrictions or requires any extra premium. This provision is standard in many insurance forms.

 10.Other Insurance

 Analysis

 The condition does not state that the insured cannot have other insurance. Rather, many insureds with commercial property to insure will carry more than one policy or more than one insurance company will insure a specific risk. The other insurance condition recognizes this but reduces all situations in which other insurance might apply to two: (1) the existence of other insurance written on any other basis than this policy, in which case the policy responds as excess insurance; and (2) the existence of other insurance written with the same provisions as this policy, in which case the policy and others are primary insurers. When two or more other primary insurers provide for contributions by equal shares, this policy contributes on that basis. Otherwise, this policy responds pro rata by limits.

 If this policy covers loss by a peril that another policy would also cover except that the other policy does not cover that peril, then the loss will be apportioned the same as though the other policy did cover that cause of loss.

 11.Premiums

 Analysis

 The first named insured is responsible for making all premium payments and receiving any return premiums. The rest of this provision was previously analyzed in connection with the examination/changes provision.

 12.Recovery from Others

 Analysis

 The most important point here is that, if the insured waives it rights of recovery against a third party after a loss has occurred, the insurer may not be obligated to pay a claim that might otherwise be covered.

 This condition defines the insurer's subrogation rights under the policy, which arise when the insurer makes a payment to or for "any insured (or others)." The reference to others preserves the insurer's subrogation rights with respect to third parties who might recover for a loss under the policy—a mortgagee or bailor, for instance. It clarifies that the insurer takes over the subrogation rights of not only the named insured, but also of any third-party claimant but only to the extent of any payment the insurer has made to that third party.

 The insured's right to waive possible recovery against third parties is retained if the waiver is made before a loss. The insured is also permitted to waive its rights of recovery after a loss when the waiver is given to another insured or to a business owned or controlled by the insured or one owning or controlling the insured.

 13.Time of Inception and Coverage Period

 Analysis

 Coverage basically begins at midnight, but insurers refer instead to 12:01 A.M. This might seem like an unusual time for a policy period to begin, but it avoids ambiguity. 12:00 A.M. might arguably be interpreted to mean either noon or midnight, and midnight is ambiguous as to whether it is the moment in time that begins or ends a particular calendar date.

 This policy covers losses that take place during the policy period, typically one year, between 12:01 A.M. on the policy's inception date and its expiration date unless otherwise specifically provided. For example, the coverage D policy term extension provision specifically states that the described periods of indemnity are not limited by expiration of the policy term.

 14.Waiver or Change of Provisions

 Analysis

 This condition stipulates that any changes in the terms of the policy can be made only by endorsement issued by the insurer. Requests for changes on the insured's part must be made by the first named insured.

 The concluding note refers to conditions applicable to liability coverage that may be provided as Part II of the same policy.

Part I – Common Exclusions

We provide no insurance for any sort of damages, expenses, liability, or loss directly or indirectly, wholly or partially, aggravated by, consisting of, or resulting from the following – even if loss otherwise covered contributes to such concurrently or in any sequence.

Analysis

Like virtually all insurance policies, this one broadly excludes all coverage for war and for nuclear incidents, but it preserves coverage for direct fire damage that ensues from a nuclear incident. Whether it is war-related, damage or destruction of property that is ordered by civil authorities is also excluded; however, damage intentionally ordered to prevent the spread of fire (such as setting a backfire or clearing an open area) is covered.

Earth movement, including earthquakes and volcanic activity, are also broadly excluded. With respect to this peril, ensuing fire, explosion, or theft (if theft is a covered peril) is, however, covered. Volcanic eruption (including damage by shock waves, ash, or lava flow) is not excluded; it is a covered peril in most policies, as discussed earlier in connection with the form's cause of loss options.

Endorsements Preprinted in the MSO General Property Form