7.5 Commercial Property Conditions, Condominium Forms, Farm Machinery & Livestock Forms, and Government & Other Crime Coverages
Key Takeaways
Under the Commercial Property Conditions form (CP 00 90), suit against the insurer must be brought within 2 years after the direct physical loss, and a coverage broadening adopted during the policy period or within 45 days before it applies automatically
The Condominium Association Coverage Form (CP 00 17) is primary over unit-owners' insurance and waives the insurer's rights of recovery against unit-owners, while the Condominium Commercial Unit-Owners Coverage Form (CP 00 18) is excess over the association's insurance
The Mobile Agricultural Machinery and Equipment Coverage Form (FP 00 30) is a self-contained open-perils form written on a scheduled or blanket basis, while the Livestock Coverage Form (FP 00 40) is a named-perils form under which a covered loss means the animal's death except for theft
The Government Crime forms (CR 00 24 to CR 00 27) let a public entity buy employee theft coverage per loss or per employee, and Faithful Performance of Duty coverage can be added by endorsement CR 25 19
Optional crime coverages include Lessees of Safe Deposit Boxes (CR 04 09), Securities Deposited With Others (CR 04 10), Guests' Property (CR 04 11) for hotels, and Safe Depository (CR 04 12) for businesses that rent safe deposit boxes
Commercial Property Conditions, Condominium Forms, Farm Machinery & Livestock Forms, and Government & Other Crime Coverages
Quick Answer: Every commercial property coverage form shares the Commercial Property Conditions (CP 00 90), including a 2-year suit limit, 45-day liberalization, and limited post-loss waivers of subrogation. Condominiums use two special forms: the Condominium Association Coverage Form (CP 00 17), which is primary and waives recovery against unit-owners, and the Condominium Commercial Unit-Owners Coverage Form (CP 00 18), which is excess. Farms add inland marine forms for mobile agricultural machinery (FP 00 30) and livestock (FP 00 40). Public entities buy Government Crime forms, and specialized crime coverages protect property held in safe deposit boxes, securities left with custodians, and guests' property at hotels.
Sections 7.1 through 7.4 covered the main commercial property, inland marine, CGL, farm, and commercial crime forms. This section covers the remaining PSI outline items in the Commercial Package Policy domain.
1. Commercial Property Conditions (CP 00 90)
Every Commercial Property coverage part includes the Commercial Property Conditions form, which applies on top of the Common Policy Conditions (IL 00 17) and the loss conditions in each coverage form:
| Condition | What the Adjuster Applies |
|---|---|
| Concealment, Misrepresentation or Fraud | The coverage part is void for fraud by the insured relating to it, or for intentional concealment or misrepresentation of a material fact about the coverage part, the covered property, the insured's interest, or a claim |
| Control of Property | Acts or neglect of anyone beyond the insured's direction or control do not affect coverage, and a breach of condition at one location does not void coverage at other locations |
| Insurance Under Two or More Coverages | When two or more coverages in the policy apply to the same loss, the insurer pays no more than the actual loss |
| Legal Action Against Us | No suit until the insured has fully complied with the coverage part, and suit must be brought within 2 years after the date of the direct physical loss (in Michigan, a fire policy must also allow at least 1 year after the loss, tolled until formal denial—MCL 500.2833(1)(q)) |
| Liberalization | A revision that broadens coverage without extra premium applies automatically if adopted during the policy period or within 45 days before it |
| No Benefit to Bailee | No person or organization (other than the insured) having custody of covered property benefits from the insurance |
| Other Insurance | If other insurance has the same terms, this insurance pays its pro rata share by limits; otherwise it is excess over the other insurance |
| Policy Period, Coverage Territory | Covers loss commencing during the policy period within the United States (including its territories and possessions), Puerto Rico, and Canada |
| Transfer of Rights of Recovery Against Others | The insured may waive recovery rights in writing before a loss; after a loss, only against another insured, a business the insured owns or controls (or that owns or controls the insured), or the insured's tenant |
2. Condominium Coverage Forms (CP 00 17 and CP 00 18)
Condominium Association Coverage Form (CP 00 17)
- Who uses it: the condominium association, which insures the buildings and the common property owned by the association or owned indivisibly by all unit-owners, plus the association's business personal property.
- What property is covered: follows the association agreement and bylaws—the form covers building fixtures, improvements, and alterations inside units that the agreement makes the association's responsibility, but generally not unit-owners' own personal property.
- Primary insurance: if a unit-owner has other insurance on property this form covers, the association's policy is primary and the unit-owner's insurance is excess.
- Waiver of rights of recovery: the insurer waives subrogation against unit-owners, who are effectively co-owners of the insured property (it may still subrogate against others, such as a unit-owner's tenant).
- Loss payment and lenders: payment may go to an insurance trustee named in the association agreement, and the form includes a mortgageholders condition.
Condominium Commercial Unit-Owners Coverage Form (CP 00 18)
- Who uses it: a business that owns its unit in a commercial or mixed-use condominium (a dental office or design firm, for example).
- What property is covered: the unit-owner's business personal property plus fixtures, improvements, and alterations the unit-owner owns. It does not insure the building, and it excludes property the association agreement requires the association to insure.
- Excess insurance: it applies only in excess of the association's insurance on the same property.
- Differences from CP 00 17: no mortgageholders condition and no waiver of recovery against unit-owners. A unit-owner's share of an association assessment can be added by endorsement (Loss Assessment, CP 04 18).
3. Farm: Other Farm Provisions, Mobile Agricultural Machinery & Livestock
Other Farm Provisions Form (FP 00 90)
The farm property forms (FP 00 12, FP 00 13, FP 00 14) rely on FP 00 90 for their shared definitions, additional coverages, and conditions:
- Definitions: "livestock" means cattle, sheep, swine, goats, horses, mules, and donkeys; "poultry" means fowl kept by the insured for use or sale; "farm personal property" means equipment, supplies, and products of farming or ranching operations.
- Additional coverages: debris removal (up to 25% of the direct loss plus deductible, with an extra 5% of the limit when needed), reasonable repairs, property removed for safekeeping (any cause, 30 days), fire department service charges, collapse (Broad and Special only), pollutant cleanup up to $10,000 a year, and glass.
- Conditions: suit within 2 years after the date of loss, liberalization within 45 days, other insurance, appraisal, and a vacancy/unoccupancy condition that reduces the payment by 15% when a building has been vacant or unoccupied for more than 120 consecutive days (2016 edition), unless a permit endorsement extends that period.
Mobile Agricultural Machinery and Equipment Coverage Form (FP 00 30)
- Covers: tractors, combines, balers, and other farm machinery and equipment designed principally for off-road use, on or off the farm.
- Basis: written on a scheduled basis (each item listed with its own limit) or a blanket basis (one limit for all covered machinery).
- Causes of loss: the form is self-contained—it carries its own open-perils coverage with exclusions, so it does not need the FP 10 60 causes of loss form and can be written as a monoline policy.
- Why farmers buy it: it follows the equipment into fields and onto roads and provides broader protection than scheduling machinery under Coverage E of FP 00 13.
Livestock Coverage Form (FP 00 40)
- Covers: the insured's livestock—cattle, sheep, swine, goats, horses, mules, and donkeys—on a named-perils basis.
- What counts as a loss: for covered causes other than theft, a loss generally means the death of the animal; for theft, the animal's death is not required.
- Basis: blanket (a limit for each class of animal with a per-animal sublimit and an 80% coinsurance clause) or scheduled (a limit for each listed animal).
- Key restriction: livestock are not covered while in the custody of a carrier for hire, which is why shipments to stockyards need separate transit protection.
4. Government Crime Forms & Other Crime Coverages
Government Crime Coverage Forms and Policies
Public entities—cities, townships, counties, school districts, and public authorities—use the Government Crime Coverage Forms (CR 00 24 Discovery, CR 00 25 Loss Sustained) or the matching monoline policies (CR 00 26, CR 00 27). They work like the commercial crime forms in Section 7.4, with these public-sector differences:
- Employee theft per loss or per employee: the government forms offer employee theft on a per loss basis (one limit for each loss regardless of how many employees were involved) and on a per employee basis (a separate limit for each dishonest employee).
- Faithful performance of duty: the Add Faithful Performance of Duty Coverage endorsement (CR 25 19) covers loss of money, securities, or other property caused by an employee's failure to faithfully perform duties as prescribed by law—a typical public-official bonding exposure.
- Triggers: the same Discovery versus Loss Sustained rules apply as in the commercial crime forms.
Other Crime Coverages (Optional Insuring Agreements)
| Coverage | Who Buys It | What It Covers |
|---|---|---|
| Lessees of Safe Deposit Boxes (CR 04 09) | A business that keeps valuables in a bank's safe deposit box | The insured's securities and other property while in a safe deposit box or vault at the depository's premises, and while being deposited or withdrawn |
| Securities Deposited With Others (CR 04 10) | A business that leaves securities with a custodian (such as a broker or bank) | The insured's securities inside the custodian's premises, in transit in the custody of the custodian's employee, or deposited by the custodian with a depository |
| Guests' Property (CR 04 11) | Hotels, motels, and inns | The insured's legal liability for loss of or damage to guests' property kept in the insured's safe deposit boxes or otherwise in the insured's possession on the premises |
| Safe Depository (CR 04 12) | Businesses that rent safe deposit boxes to customers | Liability for loss of customers' property in boxes or vaults on the premises or while being placed in or removed from them, with an option to cover such losses directly |
Edition note: ISO's June 2022 crime forms renamed the "Employee Theft" insuring agreement "Fidelity." The PSI outline uses the older name; the coverage concept is the same.
Fire damages a commercial condominium building. The association carries the Condominium Association Coverage Form (CP 00 17), and a dental practice that owns one unit carries the Condominium Commercial Unit-Owners Coverage Form (CP 00 18). The association agreement requires the association to insure the unit's built-in cabinetry. How is the cabinetry loss handled?
Both policies share the loss pro rata according to their limits
The unit-owner's CP 00 18 pays first, and the association's policy pays only the excess
Neither policy pays, because built-in condominium fixtures are property not covered
The association's CP 00 17 pays as primary insurance, and CP 00 18 does not cover property the association must insure
Under the Commercial Property Conditions form (CP 00 90), after a covered loss has occurred, the insured may waive its right of recovery in writing against which party without impairing coverage?
The insured's tenant
Any contractor the insured chooses, even an unrelated one
The manufacturer of a defective product that caused the loss
No one, because any waiver made after a loss voids coverage
A farmer insures a beef herd under the Livestock Coverage Form (FP 00 40). Which loss is most likely covered?
Cattle that die in a crash while being hauled to a stockyard by a common carrier
A calf that dies from an ordinary contagious disease
Three steers stolen from a fenced pasture, even though what happened to them is unknown
Weight loss across the herd caused by a summer drought
Sections you finish are checked off in the contents.