9.3 Causes of Loss Forms (Basic, Broad, Special)

The Three Causes of Loss Forms

The BPP coverage form lists property and limits, but a separate Causes of Loss form defines which perils are covered. The insured selects one of three:

• Basic Form (CP 10 10) — named perils, narrowest.
• Broad Form (CP 10 20) — Basic perils plus several more.
• Special Form (CP 10 30) — open-peril (all-risk), broadest.

Named-peril forms cover loss only if it results from a listed peril, and the insured must prove the peril caused the loss. The Special form reverses this: all direct physical loss is covered unless excluded, so the insurer must prove an exclusion applies.

Basic Form Perils

The Basic Form covers eleven named perils, often remembered as "FLECC SWHHV":

Note: Theft is NOT among the Basic perils.

Broad Form Additions

The Broad Form includes all Basic perils PLUS:

• Falling objects
• Weight of snow, ice, or sleet
• Water damage from accidental discharge of a plumbing or appliance system (a burst pipe)
• Collapse as an additional coverage (from specified causes)

Exam trap: Water damage from a burst pipe (Broad and Special) is NOT the same as flood, which is always excluded. A burst interior pipe is covered; rising surface water from a river is not.

The Special Form (Open-Peril)

The Special Form (CP 10 30) covers all direct physical loss to covered property unless the loss is specifically excluded or limited. This is the broadest commercial property coverage and importantly includes theft (subject to some sublimits, such as theft of furs, jewelry, or precious metals).

Because coverage is open-peril, the insurer bears the burden of proving an exclusion. For named-peril Basic and Broad forms, the insured bears the burden of proving the listed peril caused the loss — a frequently tested distinction.

Exclusions Common to ALL Three Forms

Regardless of which form is selected, the following are excluded and require separate coverage or endorsement:

• Flood (surface water) — covered only by the NFIP or a difference-in-conditions policy
• Earthquake / earth movement — requires an earthquake endorsement
• War and military action
• Nuclear hazard
• Ordinance or law — added by endorsement (CP 04 05)
• Governmental action (seizure, destruction)
• Wear, tear, and inherent vice

Memorizing this exclusion list is high-yield; questions often ask which peril is excluded even under the Special Form.

Special Form Sublimits and Limitations

Even though the Special Form is open-peril, it caps recovery on certain theft-prone or fragile items:

Exam trap: The Special Form does not give unlimited theft coverage. Theft of jewelry or furs is capped at $2,500 unless a separate inland marine or jewelers block policy is purchased.

Anti-Concurrent Causation

The causes of loss forms contain an anti-concurrent causation clause. It states that excluded perils are excluded regardless of any other cause or event that contributes to the loss, in any sequence.

Scenario: A hurricane brings both wind (covered) and storm-surge flood (excluded) that together destroy a building. Because flood is excluded and the clause bars recovery when an excluded peril contributes, the flood-driven portion is not paid even though wind also played a role. This wording resolves disputes over combined wind-and-water losses and appears regularly on exams.

Choosing a Form: A Decision Guide

Agents match the form to the risk and budget:

• Basic Form — lowest premium, narrowest perils; suitable for low-value or short-term exposures.
• Broad Form — middle ground; adds water damage, falling objects, weight of ice/snow, and collapse.
• Special Form — highest premium, broadest protection; preferred whenever theft and unforeseen perils are concerns.

Because the Special Form shifts the burden of proof to the insurer, most commercial accounts are written on it. The named-peril forms remain useful where cost control outweighs breadth of coverage.

The ISO Causes-of-Loss Forms by Number

Know the three forms by their ISO numbers and the perils they add as you move up:

Standard Exclusions Across the Forms

Even the Special Form excludes the catastrophe and non-fortuitous group: flood, earth movement, war, nuclear hazard, ordinance or law, wear and tear, and government action, plus the "anti-concurrent causation" wording that bars loss when an excluded cause combines with a covered one. Theft is the headline difference between Special and Broad — a jewelry-store burglary is covered on Special but not on Basic or Broad.

Scenario — Matching Form to Loss

A warehouse suffers (a) a roof collapse from heavy snow and (b) a separate employee-theft of stock. The Broad Form would pay the snow-load collapse (a listed broad peril) but not the theft. Only the Special Form covers both, because theft is included unless specifically excluded. A candidate who selects Broad for a theft-exposed retail risk has under-insured the client — the recurring point this topic tests.