9.2 Building and Personal Property Coverage Form (BPP)

The CP 00 10 Workhorse

The Building and Personal Property Coverage Form, CP 00 10, is the core commercial property coverage form. It answers what is insured; a separate Causes of Loss form (Section 9.3) answers which perils apply. The two must be attached together to create a complete commercial property coverage part.

The BPP divides covered property into three coverages, each scheduled with its own limit on the declarations:

• Coverage A – Building — the structure, permanently installed fixtures, machinery and equipment, owner-supplied appliances used to maintain the building, and additions/alterations.
• Coverage B – Your Business Personal Property (BPP/contents) — furniture, stock, machinery, and tenant's improvements and betterments the insured installed but cannot legally remove.
• Coverage C – Personal Property of Others — others' property in the insured's care, custody, or control; loss is paid to the owner, not the insured.

Trap: Tenant Improvements and Betterments are insured under Coverage B (business personal property), not Coverage A — the tenant does not own the building.

The declarations schedule a separate limit for each coverage at each location, and those limits do not float between coverages unless a blanket limit or the Business Income/Peak Season features apply. A common test scenario gives a tenant who insured only Coverage B and asks whether building damage is covered — it is not, because the tenant scheduled no Coverage A limit. Conversely, a building owner who rents space and insured only Coverage A has no protection for the contents inside.

Property NOT covered is its own testable list. The BPP excludes land, water, growing crops, animals, currency and securities, accounts and records (as such), vehicles licensed for road use, and aircraft and watercraft. Many of these need a specialized form — for example, an inland marine floater for mobile equipment or a crime form for money and securities.

Coinsurance — The Most-Tested Numeric

The BPP carries a coinsurance clause (commonly 80%, 90%, or 100%) requiring the insured to carry a limit equal to that percentage of the property's value at the time of loss. Underinsure and the insured shares the loss. The formula:

Recovery = (Limit Carried ÷ Limit Required) × Loss − Deductible (capped at the policy limit).

Worked example. A building is worth $500,000. The policy has 80% coinsurance, so the required limit is $400,000. The insured carried only $300,000 and suffers a $100,000 loss with a $1,000 deductible.

• Required limit = 0.80 × $500,000 = $400,000
• Coinsurance factor = $300,000 ÷ $400,000 = 0.75
• Loss adjustment = 0.75 × $100,000 = $75,000
• Less deductible = $75,000 − $1,000 = $74,000 paid

The insured eats the remaining $26,000 as a coinsurance penalty for being underinsured. If the insured had carried the full $400,000, the factor would be 1.0 and the insurer would pay $100,000 − $1,000 = $99,000.

Two refinements matter on the exam. First, coinsurance is measured at the time of loss, not at policy inception — a building that appreciates during the term can drop the insured into a penalty even though the limit was adequate when written, which is exactly what the Inflation Guard endorsement protects against. Second, when the factor would compute above 1.0 (the insured over-insured), it is capped at 1.0 — there is no bonus for carrying more than the required limit, and recovery is always capped at the policy limit regardless.

What the BPP (CP 00 10) Insures

The Building and Personal Property Coverage Form (CP 00 10) is the commercial workhorse.

It insures three categories selected on the declarations: Building (the structure, completed additions, permanently installed fixtures/machinery, and outdoor fixtures); Your Business Personal Property (BPP — contents, stock, furniture, machinery, tenant improvements you cannot legally remove); and Personal Property of Others in the insured's care, custody, or control. Coverage applies to property at the described premises or within a stated distance (commonly 100 feet) for the Property Off-Premises/Newly Acquired extensions.

Extensions, Additional Coverages, and Valuation

The BPP includes Coverage Extensions that add limits without separate premium: Newly Acquired or Constructed Property (e.g., $250,000 building / $100,000 BPP, 30 days), Personal Effects and Property of Others ($2,500), Valuable Papers and Records – cost to research ($2,500), Property Off-Premises ($10,000), and Outdoor Property (trees, shrubs, signs).

Additional Coverages include Debris Removal (25% of the loss plus the deductible, with an extra $10,000 if needed), Preservation of Property, Fire Department Service Charge ($1,000), and Pollutant Cleanup ($10,000 aggregate). Default valuation is ACV, with a Replacement Cost option (CP 04 21) and an Agreed Value option that suspends coinsurance.

Valuation, Extensions, and Additional Coverages

The BPP default valuation is Actual Cash Value (ACV) — replacement cost minus depreciation — unless a Replacement Cost option is selected on the declarations. ACV math is testable: a roof that costs $30,000 to replace, is 10 years into a 20-year life, has depreciated 50%, so ACV = $30,000 − $15,000 = $15,000.

The form also includes built-in features whose limits appear on exams:

Note the vacancy provision (also relevant in 9.3): a building vacant more than 60 consecutive days before a loss triggers reduced or suspended payment for certain perils — no recovery for vandalism, sprinkler leakage, glass breakage, water damage, or theft, and a 15% reduction on most other covered losses.