Causes-of-Loss Forms: Basic, Broad & Special
Key Takeaways
- The causes-of-loss form (basic, broad, special) is attached separately to define commercial property perils.
- Basic is a named-peril list led by fire; Broad adds falling objects, weight of ice/snow, water damage, and collapse; Special is open peril.
- Only the Special form provides limited theft coverage; named-peril forms do not.
- All three exclude flood, earth movement, ordinance or law, war, and nuclear hazard, with an ensuing-loss exception for resulting covered perils.
Choosing the Perils
In commercial property, the causes-of-loss form is attached separately to define which perils are covered. There are three, ascending in breadth, and the exam expects you to rank them and know the key perils each adds, mirroring the basic/broad/special pattern of the dwelling program.
| Form | Approach | Key perils |
|---|---|---|
| Basic | Named peril | Fire, lightning, explosion, windstorm/hail, smoke, aircraft/vehicles, riot, vandalism, sprinkler leakage, sinkhole collapse, volcanic action |
| Broad | Named peril (Basic +) | Adds falling objects; weight of ice/snow/sleet; water damage; collapse (additional coverage) |
| Special | Open peril | All direct physical loss except exclusions |
Basic and Broad Forms
The Basic Form covers a defined list led by fire and lightning and including explosion, windstorm and hail, smoke, aircraft and vehicles, riot and civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. The Broad Form adds falling objects; the weight of ice, snow, or sleet; water damage from plumbing; and a collapse additional coverage. Both are named-peril, so the insured must prove the loss came from a listed cause.
Special Form (Open Peril)
The Special Form covers all risks of direct physical loss except those excluded, shifting the burden to the insurer to prove an exclusion. It is the broadest and most popular commercial choice. The Special Form also includes a limited theft coverage that the named-peril forms lack, subject to specific exclusions and sublimits (for example, theft of certain property or by employees is limited or excluded, the latter belonging to crime coverage).
Standard Exclusions
All causes-of-loss forms exclude the familiar catastrophe and predictability perils: ordinance or law, earth movement, flood and surface water, governmental action, nuclear hazard, utility services failure (off-premises), and war. They also exclude losses from inherent defects, wear and tear, and faulty workmanship, though an ensuing-loss exception restores coverage when an excluded cause leads to a separate covered peril (faulty wiring is excluded, but the resulting fire is covered).
The anti-concurrent-causation language excludes flood and earth movement even when a covered peril contributes.
Matching the Form to the Loss
The exam tests these forms by giving a peril and asking whether each form covers it. Theft is covered only by the Special Form. Weight of ice and snow is covered by Broad and Special but not Basic. Flood and earthquake are excluded by all three and need separate coverage. When you read a commercial property scenario, identify the attached causes-of-loss form first, then check whether the peril is on the named list (Basic or Broad) or merely not excluded (Special), then apply any ensuing-loss give-back.
This form-first reasoning is the same skill used in the dwelling program, now with the commercial exclusion list and the Special Form's limited theft coverage as the additional variables the exam uses to separate strong candidates.
A commercial building suffers a theft loss. Which causes-of-loss form is required for any theft coverage?
Which peril is covered under the Broad and Special forms but NOT the Basic form?
Ranking the Causes-of-Loss Forms
Commercial property perils are defined by a separate causes-of-loss form attached to the coverage form, and the three forms ascend in breadth like the dwelling program. The Basic Form is a named-peril list led by fire and lightning and including explosion, windstorm and hail, smoke, aircraft and vehicles, riot, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. The Broad Form adds falling objects, weight of ice, snow, or sleet, water damage, and a collapse additional coverage.
The Special Form is open peril, covering all direct physical loss except exclusions.
Two distinctions are tested directly. Theft is covered only by the Special Form (subject to exclusions and sublimits); the named-peril forms omit it. Weight of ice, snow, or sleet is covered by Broad and Special but not Basic.
| Peril | Basic | Broad | Special |
|---|---|---|---|
| Fire, lightning | Yes | Yes | Yes |
| Weight of ice/snow | No | Yes | Yes |
| Theft | No | No | Yes |
| Flood, earthquake | No | No | No |
All three forms exclude the catastrophe and predictability perils, ordinance or law, earth movement, flood and surface water, governmental action, nuclear hazard, off-premises utility failure, and war, but an ensuing-loss exception restores coverage when an excluded cause leads to a separate covered peril (faulty wiring is excluded, the resulting fire is covered), and anti-concurrent-causation language excludes flood and earth movement even when a covered peril also contributes.
To answer, identify the attached form, check whether the peril is on the named list (Basic or Broad) or merely not excluded (Special), and apply any ensuing-loss give-back.
Rank the three causes-of-loss forms and memorize two distinctions the exam tests: only the Special form provides theft coverage, and weight of ice, snow, or sleet is covered by Broad and Special but not Basic.
All three exclude flood, earth movement, ordinance or law, governmental action, nuclear hazard, off-premises utility failure, and war, but an ensuing-loss exception restores coverage when an excluded cause leads to a separate covered peril (faulty wiring excluded, the resulting fire covered), and anti-concurrent-causation language excludes flood and earth movement even when a covered peril also contributes.
A fast way to answer a commercial peril question is to ask two screening questions, is the loss theft (only the Special form), and is the loss flood or earthquake (excluded by all three), before deciding among the forms, since those two screens resolve a large share of items, after which you check the Broad-form additions such as weight of ice and snow and water damage.