Chapter 8

• method of valuation - replacement cost, presuming that at the time of loss, the limit of insurnace - 80% or more of full replacement cost
• limit of insurance - automatically increase anuual % shown in Declarations
• (amt of increase x % of annual increase)/ 365 = daily amt of increase
• if coverage equal 100% of average monthly value - automatic 25% increase is provided to offset stock values

• complete contract consists of
• 1. Declaration
• 2. Coverage Form ( has 3 sections a. Sec 1 - Property, Sec 2 - Liability, Sec 3 - Common Policy Conditions, apply to both Sec 1 &2 )
• 3. any epplicable endorsements

• eligible incidental occupanices that are permitted
• office, mercantile, service, wholesaler and contractors - do not exceed 25,000 sq ft and contractor - not more than 7,500 sq ft or 15% of total area

• primarily for office use
• condominium - not exceed 6 stories in height or 100,000 sq ft in total floor areas
• same as apartment buildings for other permission

• building and business personal property - not more than 25% of annual gross sales
• not more than 25% of floor area is open to public

• annual payroll do not exceed 300,000
• total annual gross receipts do not exceed 3,000,000

Only limited-cooking restaurants and fast food restaurants are eligible

permitted structures not limited by floor area but limited to 3 stories in height; may not contain a bar or be sesonal in operation

• total annual gross receipts of sales of gasoline not exceed 75% of total annual gross receipts
• automobile service, tank filling operations and car wash are not allowed

• permitted structures not limited by floor area but limited to 2 stories buildings in heights
• cold storage or storage of chemicals, pollutants and industrial materials not allowed

automobile repair or service stations, restaurants and bars, condominium associations other than residential or office condominiums, contractors other than indicated above, building occupied in part of manufacutring or processing, amusement parks, banks and credit unions, brokers, household personal property, one or two family dwellings, wholesalers other than indicated above, self-storage facilities other than outdoor services, insured whole business operations

buildings described in declarations include completed additions, fixtures and outdoor fixtures, permanently installed equipment, insured's personal property, property used to maintain or service buildings, if not covered by other insurance

aircraft, automobiles, money or securities, property in course of illegal transportation, land, outdoor fences, trees, shrubs or plants except provided in outdoor property coverage extension and outdoor signs optional coverage, accounts, bills, computers permanently installed in vechicles and aircraft except held as stock

open peril unless the loss is excluded

not pay for property that is missing or no physical evidence to show what happened to the property

will pay the cost to tear out and replace any part of the building or structure to repair damage to the system or appliance from which the water or other substance escaped

• will pay for actual loss of business income within 12 consecutive months after date of physical loss or damage
• ordinary payroll expenses - paid only for 60 days after direct physical loss
• not subject to limits of insurance of Section I

• will pay for necessary extra expenses the insured incurs within 12 consecutive months after the date of physical loss or damage
• additional coverae not subject to limit of insurance of Section I

• Debris Removal - additional 10,000
• Preservation of property - open peril basis up 30 days stored at another location
• Fire Department Service Charge - 1,000 for insured's liability
• Collapse
• Water Damage
• Business income
• Extra Expense
• Pollution clean up and removal - 10,000 per location
• civil authority
• money orders and counterfeit paper currency - 1,000
• forgery or alternation - 2,500 for any one loss
• increased cost of construction - 10,000 for each building for repair after covered loss
• business income from dependent properties - 5,000

• Newly Acquired or Constructed property - buildings - 250,000 each building up to 30 days, Business personal property - 100,000 each up to 30 days
• Personal property off premises - can extend up to 5,000 of insurane applies to Business personal property in the course of transit or insured does not own
• Outdoor property - may extend to cover outdoor fences, radio and tv antennas, most pay up to 2,500 but not more than 5,00 for any one tree, shrub
• Personal effects - apply to personal effects of insured, insured's officers or employees up to 2,500 at each premises
• Valuable papers and records - apply to direct physical loss of valuable papers and records, 10,000 at described premises, 5,000 away from described premises
• Accounts receivable - direct physical loss of records up to 10,000 at described premises, 5,000 away from described premises

insurer will pay the applicable limits of insurance shown in declarations, pay for damage to outdoor signs- 1,000 per sign, limit automatically increase by annual % shown in declarations, limit increase by 25% if limit for business property is at least 100% of insured's average monthly values during 12 preceding months

• insurer pay the amt of loss in excess of deductible up to applicable limit of insurance of section I-property
• base deductible - 250 to 2,500
• second deductible - in place of base deductible for optional coverage
• no deductible for fire service charge, business income, extra expense, civil authority and fire system recharge expense

• outdoor signs
• money and securities
• employee dishonesty
• mechanical breakdown

extends coverage to incldue earthquake and volcanic eruption losses; up to 72 hrs after policy expiration if earthquake or volcanic eruption began before policy expired

insured is required to maintain the protective safeguards listed in the endorsements; will not pay for loss or damages caused by fire if insured knows the system is impaired and failed to notify insurer, insured must notify insurer if the automatic sprinkler system is off for more than 48 hrs

• to provide limited coverage for property damage arising out of a fungi
• additional coverage limit - 15,000