BUILDING AND PERSONAL PROPERTY (BPP) COVERAGE (551-2) Flashcards
Three types of property covered by the Building and Personal Property Coverage (BPP) if shown in the declarations
- Building
- Your business personal property
- Personal property of others
Where the BPP covers
Property located at the described locations or within 100 feet of the nearest boundary of the land considered part of the insured premises. Two coverage extensions provide limited coverage for property away from the described premises
BPP: Building
a. The building described on the declarations page plus completed additions
b. Permanently installed fixtures( personal property items permanently affect to the building) including our door fixtures
c. Permanently installed machinery and equipment
d. Your personal property used to maintain or service the building including fire extinguishers, outdoor furniture, floor coverings, and appliance used for refrigeration, ventilation, cooking, dishwashing or laundering
e. And if not covered by other insurance, additions under construction, alterations and repairs and materials, equipment and supplies and temporary structures on or within 100 feet of the building used to construct additions, alterations, and repairs
BPP: Your business personal property
In the building or within 100 feet of the described premises consisting of:
a. Furniture and trade fixtures (fixtures removable by a tenant)
b. Machinery and equipment
c. Stock (consisting of items to be sold including their packaging)
d. All your other business personal property
e. Your use interest in improvements and betterment you bought (fixtures to real property that change or enhance its value – and which may or may not include repairs and maintenance depending on the insurer’s understanding of improvements and betterments*
f. Leased personal property you’re contractually obligated to insure.
* The landlord’s interest in improvements and betterments is insured under the landlord’s building coverage. Coexistent insurance on the same improvements and betterments is enforceable since both landlord and tenant have insurable interest in them.
BPP: Personal property of others
For organizations with commercial bailment exposures (one party – the bailee – holds the property of another – the bailor – for some purpose beneficial to one or both parties.) Loss settlement is made with and payment made to the property’s owner.
Property specifically not covered by the BPP
a. Buildings and other real property: land, water, bridges, paved surfaces, retaining walls not part of the described building, piers, wharves, docks, pilings, foundations below the basement or below ground if there is no basement, underground pipes, flues, drains, and costs of excavations, grading, back-filing or filling
b. Plants and outdoor property: growing crops and lawns, outdoor harvest crops, outdoor trees, shrubs and plants (unless they are stock), outdoor fences, radio and television antennas and towers
c. Other personal property: DEMCABS (Deeds, Evidences of debt, Money, Currency, Accounts, Bills, Securities and note), vehicles/watercraft/aircraft (if licensed for use on public roads or normally operated off-premises), animals (except those held for sale or boarded by insured), electronic date (except stock of prepackaged software and electronic date integrated in the building’s structure)(additional coverage for damage to electronic data), the cost to replace valuable papers and records (limited coverage available through coverage extension), contraband and property more specifically insured under another coverage or policy.
6 BPP Additional Coverages
- Debris removal
- Pollutant cleanup and removal
- Preservation of property
- Fire department service charge
- Increase cost of construction
- Electronic date
Debris removal
We’ll pay for removal of debris of covered property on the described premises if the debris results from a covered loss. You must report expenses to us within 180 days of the date of physical loss to be covered. The most we’ll pay is 25% of the payment for direct damage loss including your deductible) plus up to an additional $25,000 when debris removal expenses exceed the amount of coverage otherwise available.
This coverage does not apply to the costs to remove:
a. your own property that is not covered by the BPP
b. property in your possession that is not covered
c. property owned or leased to your landlord unless you have contractually agreed to insure that property and it is insured under your policy
d. property that is excluded under the BPP, or
e. property of others of a type that would not be covered property
This coverage does not apply to the cost to:
a. extract pollutants from land or water or
b. remove or restore polluted land or water
Debris removal examples:
BPP limit: $500,000 on building
Deductible: $1,000
(3) Examples of Debris Removal Losses:
EX 1. Debris removal is less than 25 percent of the sum of loss payments plus the deductible
BPP limit: $500,000 on building
Deductible: $1,000
Amount of loss: $10,000 damage to building, $2,000 debris removal Debris removal is less than 25 percent of the sum of loss payments plus the deductible . (*Deductible applies to building loss and debris removal)
Sum of loss payment + deductible = $10,000
$10,000 x 0.25 = $2,500
$2,000$9,000
Insured collects:
$36,000 (for building damage) - $1,000 deductible = $35,000 (amount collected for direct physical loss)
$35,000 + $22,000 (($9,000 (25% sum of loss payments plus the deductible) plus $13,000 of the additional $25,000) = $57,000
EX 3. Building loss exceeds the amount of insurance
BPP limit: $500,000 on building
Deductible: $1,000
Amount of loss: $505,000 damage to building, $60,000 debris removal Building loss exceeds the amount of insurance
Insured collects:
$500,000 (for building damage, limit of insurance) + $25,000 (for debris removal additional limit) = $525,000
The insured’s payment is not reduced by the deductible. The deductible is subtracted from the amount of the loss not from the limit, and the remainder exceeds the limit of insurance. Therefore, the insurer pays the full building limit
Pollutant cleanup and removal
We’ll pay to extract pollutants from land or water at the described premises if their release was caused by a cover cause of loss and if you report the expenses to us within 180 days of the incident. The most we’ll pay is $10,000 per covered location per annual policy year.
Preservation of property
If property is moved to save it from covered loss, we’ll cover any (even war) direct loss to it while it is being moved or temporarily stored but only for 30 days from when it was first moved. This protection is subject to the limits of insurance.
Fire department service charge
We’ll pay up to $1,000 of required fired department service charges, no deductible.
Increased cost of construction
We’ll pay the lesser of $10,000 or 5% of the building limit for the increased cost of complying with ordinances or laws governing the repair, rebuilding or replacement of a covered building if coverage is on a replacement cost basis. There is no coverage for loss to any undamaged part of the building that must be removed or the cost to demolish the undamaged portion of the building and remove the debris.
Electronic data
We’ll pay to replace or restore electronic data that has been destroyed or corrupted by a covered cause of loss. This additional coverage does not apply to ‘stock’ of prepackaged software and electronic date integrated in the buildings structure because these items are specifically excepted from the Property not covered section of the BPP. The most we’ll pay is $2,500 per policy year, not per occurrence or location.
7 BPP coverage extensions
The 7 BPP coverage extensions apply only if 80% or higher coinsurance or value reporting applies - as additional insurance no coinsurance:
- Newly acquired or constructed property
- Personal effects and property of others
- Valuable papers and records (other than electronic data) - Cost of Research
- Property off-premises
- Outdoor property
- Non-owned detachable trailers
- Business personal property temporarily in portable storage units