9.3 Causes of Loss Forms (Basic, Broad, Special)
Key Takeaways
- Three ISO causes-of-loss forms: Basic (CP 10 10), Broad (CP 10 20), and Special (CP 10 30), with premium rising as breadth increases.
- Basic covers about eleven named perils; Broad adds falling objects, weight of ice/snow/sleet, accidental water damage, glass breakage, and collapse.
- The Special form is open-peril: it covers direct physical loss unless excluded and shifts the burden of proof to the insurer.
- Theft is covered only under the Special form (with sublimits like $2,500 on furs/jewelry/stamps), a common exam trap.
- All three forms exclude flood, earthquake, war, nuclear hazard, governmental action, and ordinance or law.
Why Three Forms Exist
The BPP says WHAT is insured; the Causes of Loss Form says against WHICH perils. ISO publishes three options that move from narrow named-peril coverage to broad open-peril coverage:
- Basic Form — CP 10 10 (named perils, narrowest)
- Broad Form — CP 10 20 (named perils plus extras)
- Special Form — CP 10 30 (open peril / 'all risk', broadest)
A fourth, the Earthquake form (CP 10 40), is added by endorsement because quake and volcanic action are excluded from all three standard forms. Premium rises as you move from Basic to Special because the breadth of covered perils expands.
Basic and Broad Named Perils
The Basic Form (CP 10 10) covers eleven named perils. A common memory aid is WCSHAFTERVV — Windstorm/hail, Civil commotion (riot), Smoke, Hail, Aircraft/vehicles, Fire, Explosion, Riot, Vandalism, Volcanic action, plus Lightning and Sprinkler leakage. In practice the Basic perils are: fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.
The Broad Form (CP 10 20) adds: falling objects; weight of snow, ice, or sleet; water damage (accidental discharge from plumbing); and collapse (as an additional coverage from specified causes). Broad also adds glass breakage coverage.
Trap: 'Water damage' under Broad means sudden accidental leakage from a system — it never includes flood, surface water, or sewer backup, which require separate coverage.
The Special Form (CP 10 30) — Open Peril
The Special Form covers risk of direct physical loss unless specifically excluded. This 'open peril' approach shifts the burden of proof: under named-peril forms the insured must prove the loss came from a covered peril; under Special, the insurer must prove an exclusion applies to deny the claim.
Key exclusions common to all three forms include: ordinance or law, earth movement (earthquake), governmental action, nuclear hazard, utility services failure, war, water (flood, surface water, sewer backup), and 'fungus'/wet rot (limited). The Special form adds limitations on theft and special limits, for example a $2,500 sublimit on theft of furs, jewelry, and stamps and limited coverage for theft of patterns and dies.
Special-form coverage is the default expectation for most well-insured commercial accounts because of the favorable burden of proof.
Quick Comparison Table
| Feature | Basic (CP 10 10) | Broad (CP 10 20) | Special (CP 10 30) |
|---|---|---|---|
| Trigger | Named perils | Named perils | Open peril |
| Burden of proof | On insured | On insured | On insurer |
| Water damage (accidental) | No | Yes | Yes |
| Weight of ice/snow | No | Yes | Yes |
| Glass breakage | No | Yes | Yes |
| Collapse (specified causes) | No | Yes | Yes |
| Theft | No | No | Yes (with sublimits) |
| Relative premium | Lowest | Middle | Highest |
All three exclude flood, earthquake, war, nuclear hazard, and ordinance or law. Note that theft is covered only under the Special form — a frequent exam trap, because candidates assume the Broad form includes it.
Collapse and the Anti-Concurrent-Causation Wording
Under Broad and Special, collapse is treated as an additional coverage, not a standard peril, and only abrupt collapse from specified causes (hidden decay, hidden insect/vermin damage, weight of people or personal property, use of defective materials during construction) is covered. Gradual settling, cracking, bulging, or expansion is excluded — a building that slowly sags is not a covered collapse.
The exclusions also use anti-concurrent-causation language: if an excluded peril (like flood or earth movement) combines with a covered peril to cause loss, the entire loss is excluded. This is why a hurricane claim splits into wind (covered) versus flood/storm surge (excluded) — adjusters must separate the causes, and the exam tests that flood damage is denied even when wind contributed.
Ordinance or Law and Earthquake Gaps
Three gaps recur on the exam because all three causes-of-loss forms exclude them:
| Excluded peril | How to cover it |
|---|---|
| Ordinance or law (code upgrades) | Ordinance or Law endorsement CP 04 05 |
| Earthquake / volcanic eruption | Earthquake form CP 10 40 |
| Flood / surface water / mudflow | Separate flood policy or DIC |
| Utility services interruption | Utility Services endorsement |
A Difference in Conditions (DIC) policy is sometimes used to fill several of these gaps at once (notably flood and quake) on large accounts, sitting alongside the primary property program. Recognizing that the standard forms leave these holes — and which endorsement plugs each one — is a reliable source of exam points.
Flood is the gap most often misread on the exam. The standard forms exclude flood, surface water, waves, mudflow, and water that backs up through sewers or drains. National Flood Insurance Program (NFIP) coverage or a private flood policy fills it; sewer/drain backup is added by its own endorsement. A stem describing a basement flooded by a swollen river is testing this exclusion — the answer is that the BPP pays nothing without separate flood coverage.
Under the Special Causes of Loss Form (CP 10 30), who bears the burden of proof in a coverage dispute?
A retail store suffers a theft loss of inventory. The store carries the BPP with the Broad Causes of Loss Form (CP 10 20). Is the theft covered?
Theft, Glass, and the Special Form Burden Shift
Moving from Basic to Broad to Special changes both the perils and the burden of proof. Under the named-peril Basic and Broad forms the insured must prove the loss was caused by a listed peril. Under the Special (CP 10 30) open-peril form the insurer must prove an exclusion applies to deny.
The Special form is the only one that automatically includes theft (Basic and Broad exclude it) and broader glass coverage. Special-form carve-outs still exclude wear and tear, gradual deterioration, vermin, mechanical breakdown, and the standard property exclusions (flood, earthquake, ordinance or law) absent endorsement.