CP DS 00-Commercial Property Coverage Part Declarations that the Insurance Services Office (ISO) developed is an advisory form. Most insurance companies modify it to meet their specific needs. However, many items remain as ISO placed them because the coverage form refers to them.
The Declarations provides information that relates directly to coverages and claims payments that are unique to them. It is designed for single location accounts. A Supplemental Declarations must be prepared for each additional location.
This section has spaces to enter the policy number and the effective date of coverage. It also contains a box to check if there is more than one location and more than one Supplemental Declarations.
The exact named insured should be listed. Coverage is provided to only the named insured. If the name is not accurate, coverage may be voided because of lack of financial interest.
When there is more than one named insured listed, the first named insured has additional rights and responsibilities. However, the same coverage applies to all named insureds. The declarations may not have enough room to list all named insureds. In that case, they can be listed on a separate endorsement.
DESCRIPTION OF PREMISES
The description of the insured premises is the starting point for coverage and underwriting and therefore must be as accurate and detailed as possible. Coverage can be denied if the address or description is incorrect or inaccurate. It is an unfortunate fact that claims are denied because of incorrect or mistaken addresses. The insured locations’ construction and occupancy are important and helpful items of information but that information alone is not sufficient to establish or verify coverage.
The location or premises information and the building numbers that apply are reprinted from the description and then the coverage is listed. The coverages that may be selected are:
- Business Personal Property
- Personal Property of Others
- Business Income with Extra Expense
- Business Income without Extra Expense
- Extra Expense
- Leasehold Interest
The coverage form can be used to provide two or more coverages. Each one selected must have a corresponding limit of insurance entered if coverage is to apply.
A causes of loss form must be selected for each coverage provided. Different causes of loss forms can apply to different coverages. For example, Causes of Loss-Special Form could apply to building coverage and Causes of Loss-Broad Form could apply to business personal property.
Each coverage provided is subject to a coinsurance percentage. The options are zero, 80%, 90%, and 100%. If Agreed Value applies, the coinsurance percentage that applies to that coverage is still entered. This is because coverage reverts to a coinsurance basis if the insurance company does not receive a proper statement of values when it is due.
The policy rate or rates that apply may or may not be entered in this area.
If an optional coverage is selected, the premises and building number(s) that it applies to is/are entered in the spaces provided. The available options on the declarations are:
- Agreed Value requires entering the expiration date of the required statement of values along with the coverage it applies to and the appropriate amount of insurance. Coverage reverts to a coinsurance basis for the percentage on the declarations if the insurance company does not receive a new statement of values when it is due.
- Replacement Cost applies to Building, Personal Property, and/or Stock only when there is an entry in the space provided for the specific coverage.
- Inflation Guard applies to only Building or Personal Property when an annual percentage (such as 1% or 5%) is selected and entered in the space provided.
- Monthly Limit of Indemnity, Maximum Period of Indemnity, and Extended Period of Indemnity options are available for business income coverages.
Certain Additional Coverages, Coverage Extensions, and Limitations permit increases in the automatic limits. These increased limits must be entered on the declarations but CP DS 00 does not provide any space to enter them. This means the insurance carrier that provides coverage must modify its version of CP DS 00 to provide for such entries. Another approach is to attach the newly introduced CP 04 08-Higher Limits and enter the increased limit(s) that applies.
The premises and building numbers from the Description of Premises section and the mortgageholder’s name and mailing address for the designated premises are entered in the space provided. This information is necessary for mailings as the Mortgageholders Additional Conditions require and for loss settlements.
COMMERCIAL PROPERTY COVERAGE PART SUPPLEMENTAL DECLARATIONS
A Supplemental Declarations must be prepared for each additional location. CP DS 01-Commercial Property Coverage Part Supplemental Declarations requires the same information as described above.
The deductible is on only CP DS 00. It is not on CP DS 01-Commercial Property Coverage Part Supplemental Declarations because it is a global deductible. CP 03 20-Multiple Deductible Form must be attached if there are multiple deductibles.
The first forms listed apply to all coverages. Forms that apply to specific coverages or locations are listed after that. This is also a global section and is not on the Supplemental Declarations.