Businessowners Program Policy Delcarations

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INTRODUCTION

The advisory insurance Services Office (ISO) Businessowners Policy Declarations summarizes and combines general policyholder information, property coverages, and general liability coverages. This is only one of a number of possible formats, since each insurance company usually develops its own declarations. It incorporates all items necessary to summarize the insurance protection the coverage form includes.

GENERAL SECTION

Identification

This part has spaces for the following entries:

  • Insurance Company Name
  • Producer/Agent Name
  • Named Insured
  • Named Insured Mailing Address
  • Policy Period beginning at 12:01 a.m. standard time at the named insured’s mailing address. Note: The policy period begins at 12:00 p.m. in some states.
Premises Information

This part has spaces for the following entries:

  • Described Premises Number, Building Number, and Address. Note: The premises and building numbers assigned to the premises are used throughout all sections of the policy.
  • Mortgageholder name and address for each premises number and building number.
Insuring Agreement

This part states that insurance is provided to the named insured in return for it paying the premium. The insurance provided is as the Businessowners Coverage Form describes and is subject to all of its terms.

Description of Business

This part has spaces for two entries.

  • The first is the form of business. The choices are:
    • Individual
    • Partnership
    • Joint Venture
    • Limited Liability Company
    • Any organization not included above. It includes corporations but is not limited to just them. Note: This part of the declarations is used in Section II-Liability C. Who is an Insured to explain who the coverage form considers to be an insured. It is not used in Section I-Property. Multiple named insureds may mean that there are multiple forms of business.
  • The second is a description of the business operation(s).

SECTION I-PROPERTY

Property Coverage Limits of Insurance

This part has spaces for seven entries. They are:

  • Premises Number
  • Building Number
    • Type of Property. This is either building, business personal property, or both
    • Actual Cash Value option for building coverage. This is either a “yes” or “no” entry.
    • Automatic Increase Building Limit (Percentage). The automatic increase is 8% unless a different percentage is entered.
    • Business Personal Property Seasonal Increase Percentage. This is 25% unless a different percentage is entered.
    • Limit of Insurance.
Blanket Insurance

If blanket insurance coverage applies, spaces are provided to list or describe the type of property and the limit of insurance that applies to it.

Deductibles

This part displays the property deductibles that apply at each location per occurrence. Three different deductibles are available for each covered premises:

  • Property Deductible
  • Optional Coverage Deductible (Other than Equipment Breakdown Protection Coverage)
  • Windstorm or Hail Percentage Deductible
Optional Coverage-Equipment Breakdown Protection Coverage Deductibles

An entry in this part is required when Optional Coverage-Equipment Breakdown Protection is provided. The covered location, the optional deductible, or the optional revised time deductible is entered in the spaces provided.

Earthquake/Volcanic Action Percentage Deductible

If earthquake and volcanic action coverage is provided under BP 10 03-Earthquake, the percentage deductible that applies to this coverage is entered in the space provided. The 07 13 edition deleted the specific reference to BP 10 03.

Theft Limitations-Optional Higher Limits (Per Policy)

Theft coverage is limited for certain types of covered property. The theft limitation is increased by entries in this part. The description of property, the higher limit(s) that apply, and the additional premium for the higher limit(s) are entered in the spaces provided.

Additional Coverages

Section I-Property 5. Additional Coverages provides each of these coverages. This part allows the insured to increase the limit of insurance, extend the number of days of coverage, add exemptions or add coverage, depending on the coverage involved. The modifications entered in the spaces provided replace the default values in the coverage form. They are not in addition to them. The coverages are as follows:

Optional Higher Limits/Extended Number of Days (Per Policy)

  • Forgery Or Alteration-Increased Limit
  • Business Income-Extended Number of Days for Ordinary Payroll Expenses
  • Extended Business Income-Extended Number of Days
  • Electronic Data-Increased Limit
  • Interruption of Computer Operations-Increased Limit

Additional Coverage-Optional Higher Limits (Per Premises)

Entries in this part allow the insured to select higher Fire Department Service Charge limits of insurance. The premises number, the higher limit that applies, and the additional premium for the higher limit are entered in the spaces provided.

Additional Coverage-Business Income-Ordinary Payroll Additional Exemptions

Entries in this part allow the insured to exclude certain job classifications and/or employees from ordinary payroll included under business income coverage.

Additional Coverage-Optional Higher limits (Per Classification)

Entries in this part allow the insured to increase the limit of insurance for Business Income from Dependent Properties. The class code that applies, the higher limit of insurance, and the additional premium are entered in the spaces provided.

Additional Coverage-Business Income from Dependent Properties

The insured can include or exclude coverage for Business Income from Secondary Dependent Properties by checking the Yes box or the No box.

Coverage Extensions-Optional Higher Limits (Per Classification)

Section I-Property 6. Coverage Extensions provides each of these coverages.

  • Accounts Receivable
  • Valuable Papers and Records
  • Outdoor Property
  • Business Personal Property Temporarily in Portable Storage Units
  • Other (Specify)
Optional Coverages

Note: Optional coverages must be selected by location. A supplemental endorsement is needed if there are more than two locations involved.

Coverages are selected by checking the appropriate box. They do not apply unless a box is checked. The location where coverage applies and the limit of insurance must be entered. If “Other” is checked, a description of the “Other” coverage must be entered. The coverages available that require an entry are:

  • Outdoor Signs-per occurrence limit
  • Money and Securities
    • Inside the Premises Limit
    • Outside the Premises Limit
  • Employee Dishonesty-per occurrence limit
  • Equipment Breakdown Protection Coverage. Entering a limit is not required.
  • When the Named Perils endorsement is attached, Money and Securities is not available. The only money option available is Burglary and Robbery optional coverage. Limits must be entered for the following:
    • Inside the Premises
    • Outside the Premises
  • Other (Specify)
Endorsements

Endorsements that apply to only the property section can be added in this part. The types of endorsements and required entries are as follows:

  • Per Policy. Enter the endorsement number and endorsement title.
  • Per Classification. Enter the class code, endorsement number, and endorsement title.
  • Per Premises. Enter the premises number, endorsement number, and endorsement title.
  • Per Specific Building. Enter the premises number, building number, endorsement number, and endorsement title.

SECTION II-LIABILITY AND MEDICAL EXPENSES

Limits

The liability part begins by listing the location or locations covered. It then has spaces for five limits of insurance:

  • Liability and Medical Expenses (Per Occurrence)
  • Medical Expenses (Per Person)
  • Damage to Premises Rented to You (Any One Premises)
  • Other than Products/Completed Operations Aggregate
  • Products/Completed Operations Aggregate
Optional Coverages

There are four optional coverages. Coverage applies only if the box for the coverage selected is checked. The coverages and limits that may be entered are:

  • BP 04 55-Broadened Coverage for Damage to Premises Rented to You (Per Occurrence)
  • Self-Storage Facilities-Customer Goods Legal Liability (Optional Increased Limits) (Per Occurrence)
  • Motels-Liability for Guests’ Property (Optional Limits) (Per Occurrence and Per Guest)
  • Motels-Liability for Guests’ Property in Safe Deposit Boxes (Per Occurrence)
Deductible

The appropriate box must be checked if the Optional Property Damage Liability Deductible is to apply. The deductibles available are:

  • BP 07 03-Business Liability Coverage-Property Damage Liability Deductible (Per Claim Basis)
  • BP 07 04-Business Liability Coverage-Property Damage Liability Deductible (Per Occurrence Basis)
Endorsements

Endorsements that apply to only the liability section can be added in these parts. The types of endorsements and required entries are as follows:

  • Per Policy. Enter the endorsement number and endorsement title.
  • Per Classification. Enter the class code, endorsement number, and endorsement title.
  • Per Premises. Enter the premises number, endorsement number, and endorsement title.
  • Per Specific Building. Enter the premises number, building number, endorsement number, and endorsement title.

PREMIUM

This part displays the total annual premium and the premium payment plan that applies for the annual term and at each anniversary for policies written for more than one year. The Advance (Deposit) Premium (if applicable) is entered in the space provided. It also addresses the audit period and audit frequency for policies written subject to audit. The audit period can be Annually, Semi-annually, Quarterly, or Monthly.

COUNTERSIGNATURE OF AUTHORIZED REPRESENTATIVE

Spaces are provided for the authorized representative’s signature. The required entries are the representative’s name, title, and signature. The countersignature date must also be entered.

The remaining area may be used for the insurance company officers’ facsimile signatures, if they are not elsewhere.