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Usage of BPP Endorsements
- provide coverage enhancements
- eliminate coverage for certain exposures
- change policy provision to meet insured's needs
- amend policy to comply with state law
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Ordinance or Law Coverage
- Coverage A: covers value of undamaged portion of a building that must be demolished
- Coverage B: covers the cost to demolish and remove debris when demolition is required by law
- Coverage C: increased cost to repair or rebuild property
- Blanket: Coverages B and C can be provided under a blanket limit
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Spoilage Coverage
- covers damage to perishable stock due to power outages, on-premise breakdown, contamination of equipment
- power outage must be caused by conditions outside of the insured's control
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Flood Coverage
- National Flood Insurance Program (NFIP): for eligible communities, max limit of $500K per building and $500K for contents; sold by brokers, backed up by US government
- Private insurers: most insurer don't write flood in zones where freq is greater than once-in-100-years; deductible is often $25K and more; can also offer excess of NFIP
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Earthquake and volcanic eruption coverage
- limited coverage and availability in high risk area such as California, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee
- generally available but overlooked in other areas
- 2 ISO endorsement: one with coinsurance and full policy limit, one with sub-limit (usually lower) and no coinsurance
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Peak season limit of insurance endorsement
covers the fluctuating value of business personal property
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Value Reporting Form
- provides insurance for the insured's maximum expected value and requires the insured to periodically report property values to the insurer
- penalties apply for failure to report (loss payment reduced to 75%), or past due reports and inaccurate reports
- premium advance is based on 75% of limit of insurance
- should select high enough limit to cover large reported values
- limitations: small insureds may not have sufficient accounting system procedures and sophistication to generate reports; insurer wouldn't want to use this endorsement on small insured since premium isn't large enough to warrant added expense of processing those reports
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