9.2 Building and Personal Property Coverage Form (BPP)

The Workhorse Commercial Property Form

The Building and Personal Property Coverage Form (CP 00 10) — the BPP — is the most heavily tested commercial property document. It offers three separate coverages, each requiring its own limit shown on the Declarations:

1. Building — the described building or structure, completed additions, permanently installed fixtures, machinery and equipment, and maintenance/service equipment such as fire extinguishing apparatus, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing, or laundering.
2. Your Business Personal Property (BPP/contents) — property the insured owns and uses in business: furniture, fixtures, machinery, stock (raw materials, in-process, and finished goods), and the insured's use interest in improvements and betterments. Covered while in or on the building or within 100 feet of the described premises.
3. Personal Property of Others — others' property in the insured's care, custody, or control; loss is paid to the owner, and recovery is part of (not in addition to) this limit.

Valuation: ACV vs. Replacement Cost

By default the BPP pays Actual Cash Value (ACV) — replacement cost minus depreciation. Insureds usually attach Replacement Cost (CP 04 53 or the option on the Declarations) to be paid without depreciation, but they must actually repair or replace within a reasonable time, or the insurer pays only ACV until they do.

Worked ACV example: a 10-year-old roof costs $30,000 new and has a 25-year expected life. Depreciation is 10/25 = 40%, so ACV = $30,000 minus $12,000 = $18,000. Under replacement cost coverage and after the insured replaces it, the insurer pays the full $30,000 (less any deductible).

Special valuation rules to memorize:

• Stock that has been sold but not delivered is valued at the selling price, less discounts and unincurred expenses.
• Glass is replaced with safety glazing only where required by law.
• Tenant improvements and betterments, if not repaired, are paid on a use-interest (pro-rata of remaining lease) basis.

Additional Coverages and Coverage Extensions

The BPP grants Additional Coverages that apply automatically:

• Debris Removal — pays up to 25% of the direct loss plus the deductible, with an extra $25,000 available if that cap is exhausted.
• Preservation of Property — covers property moved to protect it from loss, for up to 30 days.
• Fire Department Service Charge — up to $1,000 (no deductible).
• Pollutant Cleanup and Removal — up to $10,000 per year.

When the insured carries at least 80% coinsurance, the form also grants Coverage Extensions (a percentage of the limit, on top of the limit): Newly Acquired or Constructed Property (up to $250,000 buildings / $100,000 business personal property for 30 days), Personal Effects and Property of Others ($2,500), Valuable Papers and Records ($2,500), Property Off-Premises ($10,000), and Outdoor Property ($1,000, max $250 per tree/shrub/plant). These dollar figures are common fill-in-the-blank items.

What the BPP does NOT cover

The BPP lists Property Not Covered, a frequently tested exclusion list distinct from the causes-of-loss exclusions. Among the items excluded from the form regardless of peril: money and securities (covered instead under Crime forms), land, water, growing crops, and standing timber, outdoor signs not attached to the building, vehicles licensed for road use and aircraft/watercraft, animals (unless held for sale or boarding), and property more specifically covered by another policy.

Accounts, bills, and records are also excluded except for their blank cost of reproduction. The exam pairs this with the contents definition: if money is stolen from a business, the BPP does not respond — you point the candidate to a Crime coverage form.

The Vacancy condition and deductible

The BPP includes a Vacancy provision that the exam tests heavily. A building is "vacant" when it does not contain enough business personal property to conduct customary operations; for a tenant, vacancy is judged by the tenant's leased space. If the building has been vacant for more than 60 consecutive days before a loss, the insurer will not pay at all for vandalism, sprinkler leakage, building glass breakage, water damage, theft, or attempted theft, and reduces all other covered loss payments by 15%. A building under construction is not considered vacant.

The BPP applies a single per-occurrence deductible subtracted from the loss before the limit and (where applicable) after the coinsurance calculation. Sequence matters on the exam: apply coinsurance first, then subtract the deductible, then cap at the limit of insurance.