5.1 Building and Personal Property (BPP) Coverage Form

Architectural Overview of the CP 00 10 Form

The Building and Personal Property Coverage Form (CP 00 10), developed by the Insurance Services Office (ISO), constitutes the foundational contract for insuring commercial real and personal property in the United States. Designed for use either as a standalone monoline policy or integrated within a multi-line Commercial Package Policy (CPP), the CP 00 10 establishes the operational insuring agreement, property definitions, coverage extensions, and loss adjustment valuations for commercial risks.

To construct an enforceable commercial property contract, the CP 00 10 must be assembled alongside several interdependent modular components:

1. Commercial Property Declarations Page: Schedules the named insured, policy term, premises descriptions, coverage limits, coinsurance percentages, deductibles, optional coverages, and mortgageholders.
2. Common Policy Conditions (IL 00 17): Governs cancellation, policy changes, examination of books and records, inspections and surveys, premium payments, and transfer of rights (subrogation).
3. Commercial Property Conditions (CP 00 90): Establishes universal property terms including concealment, misrepresentation, or fraud; control of property; legal action against the insurer; other insurance; policy period and territory; and rights of recovery.
4. Causes of Loss Form: Dictates the perils insured against, attaching either the Basic (CP 10 10), Broad (CP 10 20), or Special (CP 10 30) form.

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The Three Core Property Coverages

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|             ISO BUILDING AND PERSONAL PROPERTY COVERAGE (CP 00 10)       |
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| Coverage A: Building                                                     |
|   - Described structural buildings, completed additions, outdoor fixtures|
|   - Permanently installed machinery, equipment, & servicing appliances   |
+--------------------------------------------------------------------------+
| Coverage B: Your Business Personal Property (YBPP)                       |
|   - Furniture, fixtures, machinery/equipment not permanently installed   |
|   - Stock (raw materials, in-process, finished goods), Tenant I&B        |
+--------------------------------------------------------------------------+
| Coverage C: Personal Property of Others                                  |
|   - In insured's care, custody, or control within 100 feet of premises   |
|   - Base sublimit: $2,500; loss payment disbursed directly to owner      |
+--------------------------------------------------------------------------+

Coverage A — Building

Coverage A insures the commercial buildings or structures designated on the declarations page. Its scope extends significantly beyond bare walls and roof framing, incorporating several distinct subcategories of real property:

• Completed Additions: Structural extensions constructed after initial occupancy.
• Fixtures and Permanently Installed Machinery and Equipment: Integrated physical plant infrastructure, such as commercial boilers, overhead cranes, walk-in coolers, passenger elevators, central HVAC units, and built-in lighting systems.
• Personal Property Used to Maintain or Service the Building or Premises: Items owned by the named insured used for facility upkeep, including fire extinguishing apparatus, outdoor furniture, floor cleaning equipment, snow blowers, lawnmowers, and landlord-supplied commercial appliances (such as refrigerators and stoves furnished in leased residential or office units).
• Additions Under Construction, Alterations, and Repairs: Materials, equipment, supplies, and temporary structures located on or within 100 feet of the described premises used for making additions, alterations, or repairs to the building, provided the insured does not carry builder's risk insurance.

Coverage B — Your Business Personal Property (YBPP)

Coverage B insures commercial personal property owned by the named insured and utilized in the conduct of business operations. To be covered, the property must be located in or on the described building, or in the open (or in a vehicle) within 100 feet of the building or 100 feet of the described premises boundaries, whichever distance is greater. Coverage B encompasses seven classes:

1. Furniture and Fixtures: Desks, display cases, executive chairs, filing systems, shelving, and unattached retail display gondolas.
2. Machinery and Equipment: Freestanding production machinery, computer servers, point-of-sale registers, pneumatic tools, and forklifts.
3. Stock: Merchandise held in storage or for sale, raw materials, goods in process, and finished goods, including supplies consumed in their packing or shipping.
4. All Other Personal Property Owned by the Insured and Used in the Business: Office supplies, marketing collateral, small tools, and consumable operations inventory.
5. Labor, Materials, or Services Furnished or Arranged by the Insured on Personal Property of Others: The economic value of work performed by a service or repair business (e.g., an auto body shop or watchmaker) on client property prior to a loss.
6. Tenant's Improvements and Betterments (I&B): Fixtures, alterations, installations, or additions made to a leased building by a tenant insured at their own expense, which cannot legally be removed under the terms of the commercial lease (e.g., custom acoustical ceilings, track lighting, commercial carpeting, partitioned offices).
7. Leased Personal Property: Property leased to the named insured for which the insured carries a contractual responsibility to procure insurance, unless specifically scheduled under Coverage C.

Coverage C — Personal Property of Others

Coverage C reimburses physical loss to property belonging to third parties that is in the named insured's care, custody, or control, situated within the described building or within 100 feet of the premises.

• Limit: Coverage C applies only when a limit is shown in the Declarations. Without one, the insured can rely only on the Personal Effects and Property of Others coverage extension, which pays up to $2,500 at each described premises when the coinsurance or reporting conditions for extensions are met.
• Adjustment and Payment Mechanics: A public adjuster must recognize that Coverage C is intended for the legal benefit of the property owner, not the named insured. The insurer reserves the contractual right to adjust the loss directly with the owner and make payment directly to that third party. Such payment discharges the insurer's liability for that property.

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Property Not Covered

Section A.2 of the CP 00 10 explicitly lists property items excluded from coverage. These exclusions prevent moral hazard, eliminate catastrophic non-insurable risks, and channel specialized exposures into dedicated inland marine, commercial auto, or crime forms.

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Additional Coverages

Additional Coverages are built directly into the CP 00 10 insuring agreement. They provide specialized coverage buckets that automatically apply without requiring an additional specific premium or satisfying separate coinsurance benchmarks.

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|                       CP 00 10 ADDITIONAL COVERAGES                      |
+----------------------------+---------------------------------------------+
| Debris Removal             | 25% of covered loss + $25,000 extra limit   |
| Preservation of Property   | 30 days open perils at temporary location   |
| Fire Department Service    | Up to $1,000 (No deductible applies)        |
| Pollutant Clean-up         | Up to $10,000 annual aggregate per location|
| Increased Cost of Constr.  | Lesser of 5% of building limit or $10,000  |
| Electronic Data            | Up to $2,500 annual aggregate               |
+----------------------------+---------------------------------------------+

1. Debris Removal

Debris removal reimburses the reasonable expense of clearing debris of covered property damaged by a covered peril. The calculation follows a two-step contractual ceiling:

• Base Percentage: Capped at 25% of the total amount paid for the direct physical loss to the covered property plus the applicable deductible.
• Additional $25,000 Limit: An extra $25,000 is available if: (a) the combined direct loss and debris removal expense exceeds the policy limit of liability, or (b) the actual debris removal expense exceeds the 25% base limitation.
• Notification Window: Expenses must be reported to the insurer in writing within 180 days of the date of direct physical loss.

2. Preservation of Property (Removal)

If it is necessary to move covered property from the described premises to preserve it from direct damage by a covered peril, the policy covers that property while being moved and for up to 30 days while stored at another location. Coverage during this 30-day window operates on an open-perils basis, even if the underlying policy utilizes Basic or Broad named perils.

3. Fire Department Service Charge

Reimburses the insured for fire department service charges when called to save or protect covered property from a covered cause of loss, up to $1,000 per occurrence, provided the liability is assumed by contract prior to loss or required by municipal ordinance. No deductible applies to this coverage.

4. Pollutant Clean-up and Removal

Pays the insured's expense to extract "pollutants" from land or water at the described premises if the discharge, dispersal, seepage, migration, or release of the pollutants is caused by or results from a covered cause of loss. The coverage is subject to a strict sublimit of $10,000 annual aggregate per location and requires written notification within 180 days.

5. Increased Cost of Construction

Provides limited compliance coverage for the increased cost incurred to comply with enforcement of municipal building ordinances or land-use laws during repair, rebuilding, or replacement of damaged building components. The limit is the lesser of 5% of the Coverage A building limit or $10,000. It applies only if Replacement Cost optional coverage is selected and the building is actually repaired or rebuilt.

6. Electronic Data

Provides up to $2,500 annual aggregate to replace or restore electronic data corrupted or destroyed by a covered cause of loss. Specified causes of loss under this provision include computer viruses, defectively coded software, and malicious cyber attacks.

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Coverage Extensions

Coverage Extensions operate as supplementary insuring agreements that become active only if a coinsurance percentage of 80% or higher, or a Value Reporting symbol, is scheduled on the declarations page. Unlike Additional Coverages, Coverage Extensions provide additional amounts of insurance above the declared policy limits.