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

Perils Come From a Separate Form

The BPP defines covered property but is silent on which perils are covered. The perils come from one of three Causes of Loss forms attached to the coverage part. Choosing the form sets the breadth of coverage and the burden of proof. This is one of the highest-yield topics on the national exam.

Basic Form (CP 10 10) — Named Perils

The Basic Form lists a limited set of named perils. A common mnemonic is WCSHAVVER: Windstorm/hail, Civil commotion (riot), Smoke, Hail (with wind), Aircraft/vehicles, Vandalism, Volcanic action, Explosion, Riot — plus Fire, Lightning, and Sprinkler leakage. The Basic Form does NOT cover sprinkler leakage as broadly, and it excludes collapse and water damage. The insured must prove the loss was caused by a listed peril.

Broad Form (CP 10 20) — Named Perils Plus

The Broad Form includes everything in the Basic Form and adds: falling objects, weight of snow/ice/sleet, water damage (sudden accidental discharge from plumbing/appliances, but not flood), and limited collapse as an additional coverage. It also adds glass breakage. Still named-perils — the insured proves the cause.

Special Form (CP 10 30) — Open Perils

The Special Form is open perils (formerly 'all-risk'): it covers risk of direct physical loss EXCEPT what is specifically excluded. This is the broadest and most expensive option. The crucial exam point is the shift in burden of proof: under named-perils forms the insured proves a covered peril caused the loss; under the Special Form the insurer must prove an exclusion applies to deny the claim.

Key Exclusions Common to All Three

All Causes of Loss forms exclude the 'big four' catastrophe and predictable losses: ordinance or law, earth movement (earthquake), flood/water (surface water, mudslide), governmental action, nuclear hazard, utility services, and war. Theft is covered only under the Special Form. Note: standard fire, lightning, and explosion are covered under every form including Basic.

Anti-Concurrent Causation

The excluded perils are introduced by lead-in language stating loss is excluded 'regardless of any other cause or event that contributes concurrently or in any sequence to the loss.' This is the anti-concurrent causation clause — if an excluded peril (say flood) combines with a covered peril (wind) to cause a loss, the exclusion still applies to the portion attributable to the excluded cause. Exams test this with hurricane scenarios separating wind damage (covered) from storm-surge flooding (excluded).

Special Form Internal Limits

Even under the open-perils Special Form, certain perils carry internal sublimits: theft of jewelry/watches/furs is limited, loss of valuable papers and records and loss to certain property by theft are capped, and there is a special limit on money and securities (often steered instead to a Crime form). The Special Form also adds a limited collapse additional coverage and water-damage repair coverage (covering the cost to tear out and replace part of the building to repair the leaking system) absent from Basic.

Three Causes of Loss Forms

The BPP states what property is covered; a separate Causes of Loss form states which perils are covered. There are three:

• Basic (CP 10 10) - a short named-perils list: fire, lightning, explosion, windstorm/hail, smoke, aircraft/vehicles, riot/civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.
• Broad (CP 10 20) - the Basic perils plus falling objects, weight of snow/ice/sleet, water damage from plumbing, and collapse from specified causes.
• Special (CP 10 30) - open perils: all direct physical loss except what is excluded; the burden shifts to the insurer.

Comparing the Forms and Their Exclusions

The practical hierarchy is Basic (narrowest) to Broad (adds frozen/falling/collapse perils) to Special (broadest, open perils). Special also adds limited theft coverage that the named-perils forms lack and includes the theft of building materials during construction. All three forms share core exclusions: ordinance or law, earth movement, flood, war, nuclear hazard, governmental action, utility failure, and "fungus"/wear-and-tear. Special-form policies also carry additional limitations on theft, dishonesty, and certain types of damage.

A scenario describing employee theft, for example, is excluded and routes to a crime policy regardless of which causes-of-loss form applies.

Matching a Loss to the Right Form

Exam items typically describe a loss and ask whether a given form responds. A burst pipe damaging inventory is covered under Broad and Special but not Basic (water damage is not a Basic peril). A mysterious disappearance of stock is covered only under Special, because open-perils coverage does not require naming the peril (subject to theft limitations). A flood from a nearby river is excluded under all three, requiring NFIP or a flood endorsement. Drilling these matchups - especially water damage being absent from Basic and theft being broadest under Special - secures several reliable points.