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

Adding Perils to the Coverage Form

The BPP says nothing about which perils trigger payment until you attach a Causes of Loss form. ISO publishes three, in ascending order of breadth: Basic (CP 10 10), Broad (CP 10 20), and Special (CP 10 30). Basic and Broad are named-peril forms — the insured must prove the loss came from a listed peril. Special is an open-peril ("all-risk") form — coverage applies unless a peril is excluded, shifting the burden of proof to the insurer.

The exam loves to ask which form is named-peril vs. open-peril and which perils distinguish Broad from Basic.

Basic vs. Broad — the Peril Lists

Basic Form (CP 10 10) covers the classic perils, easily recalled with the mnemonic FLEXVW + S:

• Fire and Lightning
• Explosion
• X (windstorm or hail)
• Vehicles (and aircraft)
• Riot/civil commotion
• Smoke, Sinkhole collapse, Volcanic action
• Plus Vandalism and Sprinkler Leakage

Broad Form (CP 10 20) = everything in Basic plus:

• Falling objects
• Weight of snow, ice, or sleet
• Water damage (accidental discharge/leakage of water or steam)
• Collapse as an additional coverage (from specified causes)
• Breakage of building glass

Special Form — Open Peril and Its Exclusions

The Special Form (CP 10 30) covers direct physical loss unless excluded. Major exclusions are the same across all three forms and are heavily tested:

• Earth movement (earthquake, landslide) and Flood — excluded; bought back by separate endorsements (Earthquake CP 10 40) or the NFIP/private flood.
• Ordinance or Law — excluded; restored by CP 04 05.
• War, nuclear hazard, governmental action
• Wear and tear, rust, corrosion, hidden decay, vermin (maintenance items)
• Mechanical breakdown (covered instead by Equipment Breakdown).

Unique to Special: theft IS covered, but it adds theft-related limitations (e.g., a special $2,500 limit on theft of furs, jewelry, patterns/dies; dishonest acts of the insured are excluded).

Trap: The flood, earthquake, and ordinance-or-law exclusions are identical in Basic, Broad, and Special — moving up to Special does NOT buy back flood or quake.

Burden of Proof and Pricing

The named-peril vs. open-peril distinction changes who must prove what at claim time. Under Basic and Broad (named peril), the insured must demonstrate the loss arose from a listed peril. Under Special (open peril), the loss is presumed covered and the insurer must prove a stated exclusion or limitation applies. This proof-burden shift, plus the extra perils, is why Special carries the highest premium and Basic the lowest.

For exam scenarios, read the peril carefully: a fact pattern naming theft, accidental damage of unknown cause, or "mysterious disappearance" signals the answer is Special, because only open-peril coverage responds to unspecified causes.

Collapse and Additional Coverages

All three forms include certain additional coverages regardless of peril breadth: Debris Removal (generally 25% of the direct loss plus deductible, with an extra $25,000 if that cap is exhausted), Preservation of Property (no deductible for 30 days while property is moved to protect it), Fire Department Service Charge ($1,000 default), and Pollutant Cleanup and Removal ($10,000 aggregate when caused by a covered peril).

Collapse is treated as an additional coverage in the Broad and Special forms (not Basic), responding to abrupt collapse from specified causes such as hidden decay, hidden insect/vermin damage, weight of people or property, or defective construction discovered during construction.

The Three Causes-of-Loss Forms

Commercial property coverage breadth is set by attaching one of three causes-of-loss forms. The Basic Form is named-peril, covering fire, lightning, 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, weight of snow/ice/sleet, water damage from plumbing, and collapse as an additional coverage. The Special Form flips to open-peril, covering all direct physical loss unless excluded, which shifts the burden of proof to the insurer.

Key Exclusions Shared Across the Forms

All three forms exclude ordinance or law, earth movement, governmental action, nuclear hazard, utility service failure, war, water (flood, surface water, sewer backup), and "fungus"/mold beyond limited amounts, many under anti-concurrent-causation language. The Special Form layers additional limitations on theft, missing property "where the only proof is shortage on inventory," and certain consequential losses. Recognizing that the same core exclusions appear regardless of form, while only the grant differs, is the conceptual key.

Theft and the Special Form's Open-Peril Advantage

Because the Basic and Broad forms are named-peril and do not list theft, theft coverage requires the Special Form (or a crime policy). The Special Form's open-peril grant automatically includes theft subject to its limitations and exclusions, which is why a business worried about employee or burglary loss either selects the Special causes-of-loss form or adds a separate crime coverage part. This trade-off, broader coverage and higher premium versus named-peril economy, is the practical decision the exam frames.