Businessowners Endorsements – Categories 05, 06 – Additional Coverages and Exclusions

Disclosure of premium attributable to coverage for certified acts of terrorism, and disclosure of federal participation in payment of potential terrorism losses and existence of the $100 billion cap, is a condition for reimbursement under the federal program. The federal share percentage for the duration of the federal program pursuant to the Further Consolidated Appropriations Act, 2020 (cited as the Terrorism Risk Insurance Program Reauthorization Act of 2019) is 80% for each of the calendar years 2020 through 2027. If the federal program is reauthorized past 12/31/2027 and there are no changes to the federal share, then the 80% federal share will continue to apply for each year beyond the end of 2027.

BP 05 15 shows the premium for certified acts of terrorism. This endorsement reflects the 80% federal share percentage for each of the calendar years through 2027. If the federal program is reauthorized past 2027 and there are no changes to the federal share, this endorsement may continue to be used beyond that date.

BP 05 17 01 06 Exclusion – Silica or Silica-Related Dust

This endorsement excludes bodily injury, property damage and personal and advertising injury arising out of silica and silica-related dust. It is a total exclusion of coverage.

BP 05 23 01 15 Cap on Losses from Certified Acts of Terrorism

When coverage for certified acts of terrorism is added, this endorsement must be attached to reflect the statutory cap on liability for losses and subject to the nuclear hazard exclusion and all other underlying policy exclusions. Coverage for acts of terrorism that are not certified (for example, acts which do not exceed the dollar threshold for federal certification or acts which occur outside the jurisdictional boundary of the federal program) is not subject to the statutory cap.

BP 05 24 01 15 Exclusion of Certified Acts of Terrorism

This endorsement may be used when certified acts of terrorism coverage is not purchased. The exclusion does not extend to acts of terrorism that are not certified as described in BP 05 23 above.

BP 05 26 01 15 Exclusion of Certified Acts of Terrorism Involving Nuclear, Biological, Chemical or Radiological Terrorism; Cap on Covered Certified Acts Losses

This endorsement may be used (if offered by the insurer) when certified acts of terrorism coverage is not purchased, but only when the insured initially rejects certified acts coverage. It excludes coverage for certified acts of terrorism only when such acts qualify as a nuclear, biological, chemical or radiological terrorism event, and covers other acts of terrorism subject to underlying policy exclusions. Coverage for certified acts of terrorism under this endorsement is subject to the statutory cap on liability for losses provided by TRIA.

BP 05 27 01 15 Limitations of Coverage for Certified Acts of Terrorism

This endorsement may be used (if offered by the insurer) when certified acts of terrorism coverage is not purchased, but only when the insured initially rejects certified acts coverage. The endorsement provides for sub-limited coverage on an annual aggregate basis under Section I - Property, at a lower limit than applies to other perils. Under Section II – Liability, coverage is subject to a certified acts of terrorism aggregate limit, while other acts of terrorism coverage remains subject to full underlying limits.

BP 05 38 01 15 Exclusion of Other Acts of Terrorism Committed Outside the United States; Cap on Losses From Certified Acts of Terrorism

This endorsement provides liability coverage for acts of terrorism (subject to the statutory cap for losses provided for certified acts provided by TRIA), but excludes those acts committed outside the jurisdictional boundaries of the federal program. The threshold for such acts is $25 million for events other than nuclear, biological, chemical or radiological events. No threshold applies to those events. This endorsement is added in addition to endorsement BP 05 23.

BP 05 41 01 15 Exclusion of Certified Acts of Terrorism and Exclusion of Other Acts of Terrorism Committed Outside the United States

This endorsement excludes all liability losses arising out of certified acts of terrorism and acts of terrorism committed outside the jurisdiction of the federal program. BP 05 41 is used in conjunction with BP 05 42.

BP 05 42 01 15 Exclusion of Punitive Damages Related to a Certified Act of Terrorism

This endorsement is mandatory whenever BP 05 23, BP 05 26, or BP 05 27, or BP 05 38 is on the policy. BP 05 42 excludes punitive damages arising out of a certified act of terrorism.

BP 05 47 08 24 Computer Fraud and Funds Transfer Fraud

This endorsement provides coverage for loss of money and securities resulting directly from a fraudulent instruction that directs a financial institution to transfer, pay or deliver money and securities from the insured's transfer account. Such fraudulent instruction includes written instructions other than those described in Forgery or Alteration Additional Coverage. BP 05 47 is designed to cover non-negotiable instructions only.

BP 05 64 01 15 Conditional Exclusion of Terrorism (Relating to Disposition of Federal Terrorism Risk Insurance Act)

This endorsement is one of several that are made conditional upon the anticipated termination of the Terrorism Risk Insurance Program (TRIP) or when its extension may mean changes to the program. BP 05 64 excludes terrorism coverage upon the termination of TRIP.

BP 05 65 01 15 Conditional Exclusion of Terrorism Involving Nuclear, Biological or Chemical Terrorism (Relating to Disposition of Federal Terrorism Risk Insurance Act)

This endorsement is one of several that are made conditional upon the anticipated termination of Terrorism Risk Insurance Program (TRIP) or when its extension may mean changes to the program. BP 05 64 excludes terrorism coverage involving nuclear, biological or chemical materials upon the termination of TRIAP.

BP 05 66 01 15 Conditional Limitation of Coverage for Terrorism – Sub-Limit on Annual Aggregate Basis (Relating to Disposition of Federal Terrorism Risk Insurance Act)

This endorsement is one of several that are made conditional upon the anticipated termination of Terrorism Risk Insurance Program (TRIP) or when its extension may mean changes to the program. BP 05 66 provides terrorism coverage subject to a Terrorism Aggregate Limit.

The next three endorsements BP 05 67, BP 05 68 and BP 05 69 are made available in the event TRIP is terminated or if there are changes in its extension that make the terms or participation different.

BP 05 67 01 06 Exclusion of Terrorism

BP 05 67 excludes terrorism coverage entirely.

BP 05 68 01 06 Exclusion of Terrorism Involving Nuclear, Biological or Chemical Terrorism

BP 05 68 excludes terrorism coverage involving nuclear, biological or chemical materials.

BP 05 69 01 06 Limitation of Coverage for Terrorism – Sub-Limit On Annual Aggregate Basis

BP 05 69 provides a limited amount of terrorism coverage, subject to a Terrorism Aggregate Limit.

BP 05 70 12 20 Disclosure of Premium Through End of Year for Certified Acts of Terrorism Coverage (Pursuant to Terrorism Risk Insurance Act)

This endorsement provides a disclosure of premium for policies that begin in the last calendar year of TRIP and extends into the following year, when a conditional exclusion is used and premium is being disclosed only for the period during which time the federal program is in effect. The endorsement recognizes the possibility of a mid-term additional premium charge.

BP 05 71 12 20 Disclosure of Premium and Estimated Premium for Certified Acts of Terrorism Coverage (Pursuant to Terrorism Risk Insurance Act)

This endorsement provides a disclosure of premium for policies that begin in the last calendar year of TRIP and extends into the following year, when premium is being disclosed only for the period during which time the federal program is in effect, and estimated premium is being disclosed for the remainder of the policy term. The endorsement recognizes the possibility of a mid-term additional premium charge or a return of excess premium.

BP 05 76 01 10 Changes – Limited Fungi Coverage

This endorsement may be used to change the property coverage that applies to fungus by either increasing the limit, changing the per policy annual aggregate limit to a specified premises or location aggregate, or to increase the number of days that apply to time element coverage. The changes must be made by appropriate entry or selection on the endorsement schedule.

BP 05 77 01 06 Fungi or Bacteria Exclusion (Liability)

This endorsement is used to totally exclude liability coverage arising out of fungi or bacteria on or within a building structure, including its contents.

BP 05 78 01 10 Limited Fungi or Bacteria Coverage (Liability)

This endorsement provides limited coverage for liability arising out of fungi or bacteria on or within a building structure, including its contents. Coverage is subject to the Fungi or Bacteria Aggregate Limit shown in the endorsement.

BP 05 89 01 10 Employment-Related Practices Liability Endorsement

This endorsement is used to provide coverage for liability arising out of claims for wrongful acts committed against an employee because of an employment-related offense, as well as a duty to defend. The endorsement schedule must be completed to show the limit, deductible, a pending or prior litigation date, an option to select malicious prosecution as a covered wrongful act, and a retroactive date. If "none' is entered as the retroactive date, coverage may be afforded for wrongful acts occurring prior to the policy inception date. The $10,000 annual aggregate limit applying to the endorsement may be increased at options of $25,000, $50,000, $75,000 and $100,000, for additional premium. The $500 deductible may be increased up to $25,000. Coverage is on a claims-made basis and an extended reporting period option can be selected if requested in writing within 30 days after the end of the policy period.

BP 05 93 01 06 Loss of Rental Value – Landlord As Designated Payee

This endorsement provides the insured tenant with coverage for loss of rental value, for the benefit of the landlord, if required in the lease agreement. Loss of rental value means the total anticipated rental income from the tenant occupancy of the premises and the amount of all charges which are the legal obligation of the tenant and which would otherwise be the designated payee's obligation.

BP 05 94 01 06 Electronic Commerce (E-Commerce)

This endorsement provides coverage for electronic data the insured owns, leases, or licenses. The data must originate and reside in computers located in the coverage territory. Coverage is also provided for business income losses or extra expenses incurred due to the necessary suspension—slowdown or cessation—of the e-commerce activity of the insured's business caused by a covered cause of loss or interruption in normal computer network service or function caused by a covered cause of loss. 

BP 05 95 12 23 Electronic Data Liability – Limited Coverage Subject to Cyber Incident Exclusion

This endorsement provides coverage for loss of computerized or electronically stored data or software which results from physical injury to tangible property. It also excludes coverage for cyber incidents and provides an exception to the electronic data exclusion for bodily injury.

For liability and medical expenses, the loss of electronic data limit shown in the schedule is the most that will be paid under business liability for property damage because of all loss of electronic data arising out of one occurrence. 

The endorsement adds a definition for "electronic data" and replaces the definition for "property damage." 

BP 05 96 12 23 Electronic Data Liability – Broad Coverage

This endorsement pays sums the insured becomes legally obligated to pay as damages because of loss of electronic data. The insurance applies only if the loss of electronic data is caused by an electronic data incident, takes place in the coverage territory, did not occur before the retroactive date, and a claim for damages is made against any insured during the policy period or an extended reporting period. 

The endorsement adds several exclusions, such as for expected or intended loss of electronic data (from the standpoint of the insured); damages that are bodily injury, property damage, or personal and advertising injury; loss of electronic data for which the insured is obligated to pay damage via contractual liability; loss of electronic data arising out of a negligent act, error, or omission by or for the insured or anyone acting on the insured's behalf in providing computer products or services; loss of electronic data that is owned or developed by the insured or is the insured's work or product; loss of electronic data arising out of the delay of failure by the insured or anyone acting on the insured's behalf to perform a contract or agreement; loss of electronic data arising out of intellectual property rights infringement; unauthorized use of electronic data; violation of an antitrust law; or criminal or fraudulent acts committed by or at the direction of the insured. 

The form replaces the who is an insured section from the Businessowners form, explains that the annual aggregate limit is the most that will be paid because of loss of electronic data, and states that the insured must ensure that the insurer be notified as soon as practicable once any insured knows or suspects that an electronic date incident has occurred. The endorsement provides for the purchase of an extended reporting period. 

Endorsement BP 05 96 replaces the definitions of "coverage territory" and "suit" and adds definitions for "computer products or services," "electronic data incident," "electronic data," and "loss of electronic data." 

The insurance is excess over any other insurance, whether primary, excess, contingent, or on any other basis, that is effective prior to the beginning of the policy period and that applies to loss of electronic data on other than a claims-made basis if there is no retroactive date or the other insurance has a policy period that continues after the retroactive date. 

BP 05 97 07 13 Extended Reporting Period for Electronic Data Liability – Broad Coverage

This endorsement modifies the Electronic Data Liability – Broad Coverage endorsement, BP 05 96, by providing an extended reporting period. An aggregate limit applies to claims first received and recorded during the extended reporting period. The insurance is excess over any other insurance, whether primary, excess, contingent, or on any other basis, whose policy period begins or continues after the endorsement takes effect. The endorsement will not take effect unless the additional premium for it is paid when due. If it is paid when due, the endorsement cannot be cancelled. 

BP 05 98 08 24 Amendment of Insured Contract Definition

This endorsement excludes liability arising out of tort liability for which the named insured or anyone acting on behalf of the named insured did not contribute, in whole or in part, to the bodily injury or property damage.

The 08 24 edition of the form revises paragraph f. of the "insured contract" definition to provide that such part of a contract or agreement shall only be considered an "insured contract" to the extent the named insured's assumption of the tort liability is permitted by law. This change was made in response to the growing number of states enacting "anti-indemnification laws".

BP 06 49 08 24 Burglary and Robbery Protective Safeguards

This endorsement is used if protective devices or services are required as a condition to coverage. The endorsement requires that the company be notified if the devices or services are discontinued or out of service. Currently, endorsement BP 04 30 Protective Safeguards Endorsement conveys the conditional aspect of coverage. Endorsement BP 06 49 is being made available to address theft protective safeguards. This new endorsement generally mirrors the provisions of BP 04 30 with some exceptions:

Paragraph A. requires that an automatic burglary alarm or other automatic system listed in the schedule must be actively engaged and maintained in the "on" position during all non-work hours and whenever the premises are unoccupied. This explicit requirement is in reaction to claims scenarios in which automatic alarm systems were not activated and creative arguments were advanced by policyholders asserting that inactivation does not equate to suspension or impairment of a protective safeguard. Clearly, a protective safeguard that is not activated does not provide protection and as such does not fulfill the expectation that is integral to the insurer's acceptance of the risk.

A related condition enables use of the schedule to specify additional requirements for activation of an automatic burglary alarm or other automatic system, or parts thereof. For example, some retail establishments and museums might have valuable property in display cases that are to be protected even during business hours.

An exception to the requirement to notify the insurer of suspension or impairment of the protective system provides that notification is not necessary with respect to suspension or impairment of an automatic burglary alarm or other automatic system if protection can be restored within 48 hours and the insured provides at least one watchperson or other means of surveillance during non-work hours and whenever the premises are otherwise unoccupied (and during work hours if so required in the schedule).

Includes copyrighted material of Insurance Services Office, Inc., with its permission.

Businessowners Endorsements – Categories 05, 06 – Additional Coverages and Exclusions