9.3 Causes of Loss Forms (Basic, Broad, Special)
Key Takeaways
- Basic (CP 10 10) and Broad (CP 10 20) are named-perils forms; Special (CP 10 30) is open perils (all except exclusions).
- Theft is covered ONLY under the Special form; flood and earthquake are excluded under all three.
- Under named-perils forms the insured proves a covered peril; under Special the insurer must prove an exclusion.
- Broad adds falling objects, weight of snow/ice/sleet, water damage, and glass breakage to Basic.
- After 60 consecutive days of vacancy, certain perils are not paid and all other covered losses are reduced 15%.
Causes of Loss Forms
A commercial property coverage form (such as the BPP) describes WHAT property is covered, but a separate Causes of Loss form describes WHICH perils trigger coverage. There are three standard ISO forms, layered from narrowest to broadest.
- Basic Form (CP 10 10) — a named-perils form covering a fixed list, commonly remembered as the "WCSHAVVER" perils: Windstorm/hail, Civil commotion/riot, Smoke, Hail (part of windstorm), Aircraft/vehicles, Vandalism, Volcanic action, Explosion, Riot — plus fire, lightning, and sprinkler leakage.
- Broad Form (CP 10 20) — everything in Basic PLUS falling objects; weight of snow, ice, or sleet; water damage (accidental discharge from systems); and glass breakage (collapse is an additional coverage).
- Special Form (CP 10 30) — the broadest. It is an "open perils" (formerly "all-risk") form covering direct physical loss from any cause EXCEPT those specifically excluded. Special adds theft coverage, which neither Basic nor Broad includes.
The burden-of-proof flip
This is the single most important conceptual point of the section. Under named-perils forms (Basic and Broad), the insured must prove the loss was caused by a listed peril. Under the Special (open-perils) form, the burden flips: the insurer must prove an exclusion applies in order to deny the claim. Open-perils coverage is therefore more favorable to the insured.
How the three forms are priced and chosen
The forms are priced in ascending order — Special costs the most because it covers the most. An agent selects the form based on the client's risk tolerance and budget. A warehouse storing low-theft commodity goods in a dry region may accept Basic; a downtown retailer with valuable, easily stolen inventory and burst-pipe exposure needs Special for theft and water damage. Remember that the coverage form (what property is insured) and the causes-of-loss form (which perils apply) are chosen independently, so the same BPP can be paired with any of the three peril forms.
| Peril | Basic (CP 10 10) | Broad (CP 10 20) | Special (CP 10 30) |
|---|---|---|---|
| Fire, lightning, explosion | Covered | Covered | Covered |
| Windstorm, hail, smoke, riot, vandalism | Covered | Covered | Covered |
| Sprinkler leakage, volcanic action | Covered | Covered | Covered |
| Falling objects; weight of snow/ice/sleet | Not covered | Covered | Covered |
| Water damage (accidental discharge), glass breakage | Not covered | Covered | Covered |
| Theft | Not covered | Not covered | Covered |
| Coverage trigger | Named perils | Named perils | Open perils (all except exclusions) |
| Burden of proof | Insured | Insured | Insurer |
Trap: Theft is covered ONLY under the Special form. If a question describes stolen business personal property, the answer is Special (CP 10 30). Likewise, flood and earthquake are excluded under all three forms and require a separate policy or endorsement (such as a Difference in Conditions policy or the NFIP for flood).
Common exclusions across all three forms
All three causes-of-loss forms exclude the same major catastrophe and "uninsurable" perils, regardless of how broad the form is:
- Flood / surface water / mudflow (buy NFIP or DIC).
- Earthquake and earth movement (buy endorsement CP 10 40 or DIC).
- Ordinance or law (cost to comply with building codes — buy CP 04 05).
- War, nuclear hazard, governmental seizure.
- Wear and tear, deterioration, mechanical breakdown, and mold/fungus (gradual losses).
The vacancy provision
The causes-of-loss forms cut coverage when a building has been vacant for more than 60 consecutive days before a loss. After 60 days of vacancy, the insurer (a) will not pay at all for loss caused by vandalism, sprinkler leakage, building glass breakage, water damage, theft, or attempted theft; and (b) reduces the payment by 15% for any other covered cause of loss. A building is considered vacant when it does not contain enough business personal property to conduct customary operations.
Worked vacancy example: A building vacant for 75 days suffers a $40,000 covered fire loss. Fire is not on the no-pay list, so it is payable, but the 15% vacancy reduction applies: $40,000 × (1 - 0.15) = $34,000 (before deductible).
A retail store's business personal property is stolen overnight. Under which Causes of Loss form(s) would this theft be covered?
A building has been vacant for 75 consecutive days when a covered fire causes $40,000 in damage. How does the vacancy provision affect the payment (before deductible)?
Choosing Among Basic, Broad, and Special — and the Earthquake/Flood Gap
The three causes-of-loss forms determine which perils the BPP responds to:
| Form | Perils | Burden of proof |
|---|---|---|
| Basic (CP 10 10) | Fire, lightning, explosion, windstorm/hail, smoke, aircraft/vehicles, riot, vandalism, sprinkler leakage, sinkhole, volcanic action | Insured proves a listed peril |
| Broad (CP 10 20) | Basic + falling objects, weight of snow/ice, water damage, collapse | Insured proves a listed peril |
| Special (CP 10 30) | Open peril (all risks of direct physical loss) | Insurer proves an exclusion |
Exam alert: All three forms exclude flood and earthquake; these require a separate Earthquake (CP 10 40) form/endorsement and a flood policy (NFIP or difference-in-conditions). The Special form's value is the burden-of-proof flip — covered unless excluded — but it still carries the same earth-movement and water exclusions, plus exclusions for wear/tear, dishonesty, and ordinance or law. A "mysterious disappearance" of stock is typically covered under Special but not under Basic/Broad, a recurring distinction.