9.2 Building and Personal Property Coverage Form (BPP)

The core commercial property form: BPP (CP 00 10)

The Building and Personal Property Coverage Form, ISO CP 00 10, is the workhorse of the Commercial Property Coverage Part. It is paired with the Commercial Property Conditions (CP 00 90) and a Causes of Loss form to create complete coverage. The BPP alone names what is covered; the Causes of Loss form names which perils are covered.

The BPP offers three property coverages, each scheduled separately with its own limit on the declarations:

1. Building — the structure, permanently installed fixtures, machinery and equipment, owner-supplied appliances for maintenance/service, and additions/extensions.
2. Your Business Personal Property (BPP/contents) — furniture, stock, machinery the insured owns, tenant improvements and betterments, and leased property the insured is responsible for.
3. Personal Property of Others — covered while in the insured's care, custody, or control; loss is paid to the owner.

Coverage extensions, additional coverages, and key limits

The BPP automatically provides several Additional Coverages and Coverage Extensions that the exam tests with specific dollar caps (these apply when the insured carries 80% coinsurance or more, except debris removal):

Loss valuation and coinsurance

Unless endorsed, the BPP pays losses at Actual Cash Value (ACV) — replacement cost minus depreciation. The insured can elect Replacement Cost (RC) valuation on the declarations.

The BPP carries a Coinsurance condition (commonly 80%, 90%, or 100%). If the limit carried is less than the required percentage of value, the insured is penalized at the time of loss by the formula:

(Did / Should) × Loss − Deductible = Payment

Worked coinsurance example. A building is worth $500,000. The policy carries an 80% coinsurance clause, so the insured should carry $400,000 but only insures it for $300,000. A fire causes a $100,000 loss; deductible is $1,000.

• Should carry = $500,000 × 0.80 = $400,000
• Coinsurance ratio = $300,000 / $400,000 = 0.75
• 0.75 × $100,000 = $75,000
• Minus deductible = $74,000 paid (insured absorbs $26,000 as penalty + deductible)

Covered, not-covered, and the deductible mechanics

The BPP draws sharp lines around what counts as covered property. Building includes completed additions, permanently installed fixtures, machinery, and equipment, plus — if not covered elsewhere — outdoor fixtures, personal property used to maintain the building, and materials within 100 feet used for additions and repairs. Your Business Personal Property covers property the insured owns and uses, tenant's improvements and betterments the insured made but cannot legally remove, and labor/materials furnished on others' property.

The form also lists Property Not Covered, a frequent exam target: accounts, bills, currency, deeds, money and securities (insured under Crime forms instead), land, water, growing crops, animals (unless boarded or owned for sale), aircraft, watercraft, vehicles licensed for road use, and the cost of excavations and foundations below the lowest floor. Money and securities exclusion is the classic trap — it points the candidate toward a Crime coverage part.

Deductibles apply per occurrence, after the coinsurance calculation. Sequence matters: first apply the coinsurance ratio to the loss, then subtract the deductible. The form pays the least of (1) the limit, (2) the coinsurance-adjusted loss minus deductible, or (3) the cost to repair or replace. Replacement-cost claims are paid at ACV first and the depreciation holdback is released only after the insured actually repairs or replaces and submits the bills — another commonly tested settlement nuance.

Covered Property Categories and the Key Extensions

The Building and Personal Property Coverage Form (CP 00 10) organizes covered property into three buckets the exam expects candidates to separate: Building (the structure, fixtures, permanently installed equipment, owner-supplied appliances, and additions); Your Business Personal Property (inventory, furniture, machinery, and the insured's stock used in the business, located in or within 100 feet of the premises); and Personal Property of Others in the insured's care, custody, or control.

The form's Coverage Extensions add limited amounts for newly acquired property, personal effects, valuable papers, outdoor property, and property off-premises, each capped. Important property not covered includes land, water, currency, accounts, bills, vehicles licensed for road use, and the cost of excavations.

The deductible applies per occurrence and is subtracted after the coinsurance calculation, and the optional coverages (Agreed Value, Inflation Guard, Replacement Cost, and Extension of Replacement Cost to Personal Property of Others) modify valuation and the coinsurance penalty — exactly the levers a commercial insured pulls to avoid being penalized for underinsurance.

Coinsurance and Valuation on the BPP

Commercial property carries the same coinsurance discipline as personal lines but is applied per the BPP's stated percentage (commonly 80%, 90%, or 100%). Losses settle at ACV unless the Replacement Cost optional coverage is elected, and the Agreed Value option suspends coinsurance when the insured files a statement of values. A worked reminder: apply depreciation or coinsurance first, then the deductible — never the reverse.