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

Three Tiers of Perils

The BPP defines what property is covered; the Causes of Loss forms define which perils will trigger payment. ISO publishes three escalating tiers, and the exam routinely asks you to slot a named peril into the right form:

• Basic Form — CP 10 10: a named-perils form covering the classic group. Mnemonic "WCSHAVVERS": Fire, Lightning, Windstorm/hail, Civil commotion/riot, Smoke, Hail (grouped with wind), Aircraft/vehicles, Vandalism, Volcanic action, Explosion, Riot, Sprinkler leakage. Note: collapse is NOT in Basic.
• Broad Form — CP 10 20: everything in Basic plus falling objects; weight of snow, ice, or sleet; water damage from plumbing; and collapse (as an additional coverage from specified causes).
• Special Form — CP 10 30: "open perils" (formerly all-risk) — covers risk of direct physical loss except what is specifically excluded. This is the broadest and shifts the burden of proof: the insured must prove a loss occurred; the insurer must prove an exclusion applies.

Special Form Exclusions and Limitations

Because Special Form covers everything not excluded, mastering the exclusions matters more than the inclusions. Common excluded causes:

Special Form also imposes special limits, e.g., theft of furs, jewelry, and patterns; and it excludes theft of money and securities (a crime-coverage item).

Placing a Peril in the Right Tier

The most common exam mistake is assuming Basic covers more than it does. Use this decision chain:

1. Is the peril one of the WCSHAVVERS group? → covered by Basic (and up).
2. Is it falling objects; weight of snow/ice/sleet; water damage from plumbing; or collapse from specified causes? → needs at least Broad.
3. Is it something unusual but not excluded — theft, accidental spillage, a falling sign — with no named peril? → only Special responds.

Worked scenario: A roof collapses under heavy snow. Basic excludes both weight-of-snow and collapse, so it pays nothing. Broad covers weight of snow/ice/sleet, so it pays. Special also pays (snow load is not excluded). The single fact pattern can produce three different outcomes depending on which form is attached — exactly how the exam tests it.

Theft, Glass, and Premium Implications

A practical rule: theft is covered only under Special Form. Basic and Broad do not list theft as a peril, so a burglary loss to business personal property is paid only if Special is attached (subject to the special sub-limits on furs, jewelry, and precious metals). This is a classic distractor — a question may describe a theft loss under a Broad Form policy expecting you to deny it.

Premium tracks breadth: Special Form costs the most, Broad sits in the middle, and Basic is cheapest. Producers recommend Special for most commercial accounts because the open-perils trigger and favorable burden of proof reduce coverage disputes. When an insured wants to economize, the producer should explain exactly which perils — theft, water damage, collapse, falling objects — are surrendered by dropping to Broad or Basic, since those gaps are where uncovered claims surface.

Remember two structural facts the exam pairs with these forms: the collapse coverage under Broad and Special is an additional coverage triggered only by specified causes (hidden decay, vermin, defective construction, weight of people or property), not ordinary settling or cracking; and sprinkler leakage appears in all three tiers, so a burst fire-suppression line is covered even under Basic. Mapping each peril to its lowest qualifying tier is the skill the exam rewards.

Specified Causes of Loss and the Special Form Exclusions

The commercial causes-of-loss forms use a defined term, "specified causes of loss," that the exam treats as a precise list: fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, leakage from fire-extinguishing equipment, sinkhole collapse, volcanic action, falling objects, weight of snow/ice/sleet, and water damage. This list is the trigger for several additional coverages (such as collapse) and is narrower than open-peril Special coverage, so distinguishing "specified causes of loss" from "all risk" is a tested nuance.

The Special Form (CP 10 30) covers all direct physical loss except what it excludes, and its exclusions fall into two groups. Group 1 (ordinance or law, earth movement, governmental action, nuclear hazard, utility services, war, water/flood) is subject to anti-concurrent causation, so a loss is excluded if one of these contributes in any sequence.

Group 2 (artificially generated electrical current, certain water damage, and others) lacks the anti-concurrent language. The Special form also imposes limitations rather than outright exclusions on certain property, such as a sublimit on theft of furs and jewelry and on damage to property in transit.

The water exclusion is heavily tested: the forms exclude flood, surface water, and water that backs up from a sewer or drain, but a sewer-backup endorsement can add limited coverage, and water discharged from a building's own plumbing system (a burst pipe) is generally covered. Mapping a water loss to the right side of this line decides many commercial claims.

Worked scenario: a burst interior water pipe floods a store, and a separate storm surge floods it the same week. The interior pipe loss is covered (it is not the excluded flood), while the storm-surge flood is excluded under the water exclusion and requires a separate flood policy. Sorting a water loss into covered plumbing discharge versus excluded flood is the signature commercial water question.

Key Takeaways

The defined term "specified causes of loss" is a fixed list (fire, lightning, explosion, wind/hail, smoke, aircraft/vehicles, riot, vandalism, sprinkler leakage, sinkhole, volcanic action, falling objects, weight of ice/snow, water damage) that triggers certain additional coverages. The Special form covers all but its exclusions, with Group 1 exclusions subject to anti-concurrent causation. The water exclusion bars flood and sewer backup (endorsable) but not a burst interior pipe, a frequent distinction.