The Insurance Services Office (ISO) provides a sample declarations for insurance companies to use or refer to as they develop their own unique declarations. It includes descriptive and inclusive language that clearly identifies the risk, coverage information that relates to specific areas in the coverage form, and rating and premium information that applies to each coverage provided.
This section of the sample declarations includes the following information:
- Insurance company name
- Producer name
- Named insured’s name and mailing address – Note: The first named insured is treated differently than any other insured named. Its responsibility is to pay premiums and to receive return premiums. It is also the only named insured that receives notices of cancellation and other correspondence. The notice is mailed to the mailing address listed. The notice mailed applies even if the mailing address is incorrect.
- Policy number
- Policy period, expressed as month, day, and year commencing at 12:01 a.m. at the named insured’s mailing address
COVERAGES AND LIMITS OF INSURANCE
Coverage applies to only items that have a limit of insurance, a number of days or hours or the word INCLUDED shown. If INCLUDED is shown, the limit for that coverage is part of the Limit per Breakdown. When limits are shown, they are sublimits subject to the Limit per Breakdown.
The Limit per Breakdown is the most paid for a breakdown event. There are 10 primary coverages but some of them have additional coverages that are available and that can be selected. The appropriate entry must be shown for the coverage desired. There is no coverage if there is no entry. When a limit is required, the word INCLUDED can be entered instead. This means there is no sublimit applying to the coverage and it is part of the Limit per Breakdown.
- Property Damage
- Expediting Expense
- Business Income/Extra Expense
- Extra Expense Only
- Extended Period of Restoration – The number of days must be entered.
- Data or Media – The limit is $25,000 unless another limit is entered. INCLUDED is not an option.
- Spoilage Damage
- Utility Interruption – A number of hours must be entered in the space provided in order for coverage to apply.
- Newly Acquired Premises – This coverage applies only if the number of days for which coverage applies must be entered in the space provided. The coverage form does not contain a default number of days. The limit is determined based on the coverages at other existing premises.
- Ordinance or Law
- Errors and Omissions
- Brands and Labels
- Contingent Business Income/Extra Expense
- Covered Premises – The contingent property’s address must be entered in the space provided.
- Sales, Service, or Materials – A description of the sales, services or materials the contingent location provides must be entered in the space provided.
LIMITED COVERAGE FOR FUNGUS, WET ROT, AND DRY ROT
This coverage automatically applies to loss due to fungus, wet rot, and dry rot that results directly from a covered equipment breakdown that occurs during the policy period. The limit of insurance is $15,000 unless a different limit is entered in the space provided.
This section also gives the named insured the option to provide a specific limit at separately listed and described premises.
In addition, this section gives the named insured the option to change the standard 30 days of coverage for Business Income and Extra Expense (or Extra Expense Only) to the revised number of days entered in the space provided.
INCREASED COST OF LOSS AND RELATED EXPENSES FOR GREEN UPGRADES
Property Damage coverage for green upgrades is automatic. It is limited to 25% of the total property damage loss or $100,000, whichever is less. The limit can be changed by entering a different limit or the word INCLUDED in the space provided.
Business Income and Extra Expense (or Extra Expense Only) coverage for green upgrades is automatic for up to 30 days. The number of days can be changed by entering a different number of days in the space provided.
The limit of insurance is $25,000 for each of the following coverages. Higher limits are available or the word INCLUDED can be entered in the space provided. The automatic limit or the limit entered is the most paid for direct damage to covered property. These limits are sublimits, not additional insurance. As a result, they are subject to both the Property Damage Limit and the Limit per Breakdown. When the word INCLUDED is entered in a space, it means that the only limit is the Limit per Breakdown.
- Ammonia Contamination
- Consequential Loss
- Data and Media
- Hazardous Substance
- Water Damage
CONDITIONS AND OPTIONAL COVERAGES
This section has spaces to enter any of the following information that applies:
- Business Income Annual Value
- Business Income Coinsurance Percentage
- Business Income Report Date – This is the date when the first report of value is required.
- Diagnostic Equipment (Included or Excluded) -Coverage for diagnostic equipment is excluded unless the word INCLUDED is entered.
When the word INCLUDED is the Limit of Insurance for a coverage, the only deductible that applies is the Combined Deductible shown below. This deductible is applied once and is subtracted only once from the aggregate of all of the INCLUDED coverage loss amount before payment is made.
When specific dollar amounts or number of hours or days is shown as the Limit of Insurance for a coverage, the deductible shown for that type of coverage applies for each coverage loss amount. Possible entries are as follows:
- Business Income and Extra Expense
- Other (describe)
- Property Damage
- Spoilage Damage
- Utility Interruption
When some coverages show amounts or hours/days and others show INCLUDED, the combined deductible applies to the INCLUDED coverages while the amount and hours/days deductible(s) apply per coverage.
ADDITIONAL INSUREDS, MORTGAGEHOLDERS, AND LOSS PAYEES
Spaces are provided to enter the names and addresses of any additional insureds, mortgageholders, or loss payees.
All forms or endorsements included when the policy is issued are entered by a form number in the space provided. Endorsements issued after the policy is issued are included by inference.
COUNTERSIGNATURE OF AUTHORIZED REPRESENTATIVE
This section contains spaces to enter the following information:
- The name of the representative authorized to countersign
- The representative’s title (if applicable)
- A space for the authorized representative’s signature
- A space for the date that the authorized representative signs the document