9.2 Building and Personal Property Coverage Form (BPP)

The CP 00 10 Form: What Commercial Property Insures

The Building and Personal Property Coverage Form (BPP), CP 00 10, is the ISO backbone of commercial property insurance. It answers what property is insured and how loss is settled; a separate Causes of Loss form answers which perils trigger coverage. On the Nevada P&C exam (141 scored items, scaled passing score of 70), BPP questions appear in property types, policy provisions, and calculation items—often combined with coinsurance math you practiced in property fundamentals.

Every BPP policy insures only the coverages for which a limit of insurance appears on the declarations. No limit beside Coverage B means no Coverage B protection, regardless of what sits inside the building.

Coverage A — Building

Coverage A — Building insures the described building(s) at listed locations, including:

• Completed additions and fixtures, including outdoor fixtures
• Permanently installed machinery and equipment
• Personal property owned by the insured used to maintain or service the building (fire extinguishers, floor coverings, appliances, HVAC equipment)
• Additions, alterations, and repairs in progress
• Materials, equipment, and supplies used for construction of additions

Owner-occupants: Built-in fixtures, central HVAC, and permanently attached lighting are Building. Tenants: The landlord's building shell is the landlord's Coverage A; the tenant does not insure the landlord's structure unless contractually required.

Coverage B — Your Business Personal Property

Coverage B — Your Business Personal Property (BPP) covers property owned by the insured and used in the business:

• Furniture, fixtures, machinery, and equipment (non-permanently installed)
• Stock—raw materials, goods in process, finished goods, and supplies held for sale
• Tenant Improvements and Betterments—alterations the tenant made and cannot legally remove at lease end

The tenant improvement trap is the most-tested BPP concept: improvements a tenant installs (built-in cabinetry, specialty flooring, trade fixtures) are Coverage B for the tenant, not Coverage A Building—even though they are physically attached. The landlord's Coverage A insures the original structure; the tenant insures removable-or-irremovable improvements as BPP.

Coverage C — Personal Property of Others

Coverage C — Personal Property of Others covers property belonging to others that is in the insured's care, custody, or control. Payment is made to the property owner, even when the insured is not legally liable. Dry cleaners, repair shops, and warehouses use Coverage C for customers' goods.

Coverage Classification Table

Property Not Covered

The BPP lists property not covered—frequently tested against the broad grants above:

• Money, securities, accounts, bills, and electronic data (insure under crime or specialized forms)
• Land, water, growing crops, and underground pipes/flues/drains
• Autos licensed for road use and autos held for sale (commercial auto policy)
• Cost of excavations, grading, backfilling, and foundations below the lowest basement floor
• Outdoor signs not attached to the building
• Property covered under other policy sections or specifically excluded endorsements

Vehicles on the road belong on commercial auto, not BPP. A Henderson contractor's pickup registered for highway use is excluded from BPP even if stolen from the job site.

Deductibles and Mortgagee Rights

The BPP uses a flat per-occurrence deductible applied once per loss, even when multiple buildings or coverages are damaged in the same event. One windstorm damaging two insured buildings at one location triggers one deductible.

The mortgage holder (mortgagee) receives special protection:

• Loss payment to the extent of the mortgagee's interest
• Notice of cancellation to the mortgagee
• Coverage continues for the mortgagee even if the insured's claim is denied for fraud or breach of conditions—if the mortgagee pays any due premium and files proof of loss when requested

Coverage Extensions

When the insured meets the form's coinsurance requirement (typically 80% or more), several coverage extensions apply as additional limits beyond the stated Coverage A/B limits:

The 30-day newly acquired property extension protects Nevada businesses that expand quickly—opening a second Carson City location or acquiring inventory-heavy stock from a closing competitor—before endorsements are processed.

Additional Coverages

Additional coverages pay over and above policy limits (unlike extensions, which are sublimits):

• Debris removal—25% of loss payment plus deductible; additional $25,000 if exhausted
• Preservation of property—reasonable costs to move property to prevent further damage
• Fire department service charge—up to $1,000
• Pollutant cleanup and removal—up to $10,000 per 12-month period when discharge results from covered cause of loss

Valuation: ACV Versus Replacement Cost

Default settlement is Actual Cash Value (ACV)—replacement cost minus depreciation—unless Replacement Cost is elected on the declarations.

ACV example: Commercial kitchen equipment costs $50,000 new and is 40% depreciated. ACV = $50,000 − $20,000 = $30,000 maximum settlement before deductible.

Replacement Cost conditions: The insurer pays without depreciation only if the insured actually repairs or replaces within the specified period. Until then, payment is ACV with depreciation held back and released after replacement. RC does not apply to:

• Stock held for sale (settled at selling price less discounts)
• Tenant improvements the tenant chooses not to replace
• Property not repaired or replaced within the time limit

Coinsurance Penalty: Worked Example

The BPP coinsurance clause requires insurance equal to a stated percentage (commonly 80%) of value at time of loss. Underinsurance triggers a proportional penalty—even when the loss is less than the policy limit.

Scenario: A Sparks manufacturing building valued at $500,000 has an 80% coinsurance clause. Required insurance = $500,000 × 80% = $400,000. The insured carries only $300,000. A covered fire causes $100,000 damage; deductible is $1,000.

The insured absorbs a $25,000 coinsurance penalty for carrying only 75% of the required limit—even though the $100,000 loss was well below the $300,000 policy limit.

Nevada Producer Scenarios

Las Vegas restaurant tenant: The tenant installs $80,000 of custom kitchen equipment and built-in bar fixtures that cannot be removed at lease end. These are Coverage B tenant improvements, not the landlord's Building.

Elko retail store newly acquired location: The insured purchases an existing shop and begins operations without reporting to the insurer. For 30 days, up to $250,000 building and $100,000 BPP are automatically covered at the new location if coinsurance is met—then the insured must report.

Reno office ACV settlement: A covered water loss destroys $15,000 of computers depreciated to $6,000 ACV. Without RC endorsement, the insurer pays $6,000 (minus deductible), not replacement cost for new equipment.

Exam Traps

1. Tenant improvements = Coverage B, not Building, for tenants.
2. Coinsurance penalty applies to partial losses below the policy limit.
3. RC requires actual replacement—no repair, no full RC payment.
4. Stock is not valued at RC even when RC is elected for other property.
5. One deductible per occurrence, not per building or coverage.

The BPP form defines the commercial property universe. Pair it with the correct Causes of Loss form and adequate limits, and your Nevada commercial clients avoid the underinsurance surprises that dominate E&O claims after major losses.