9.3 Causes of Loss Forms (Basic, Broad, Special)
Key Takeaways
- Causes of Loss forms attach perils to the CP 00 10: Basic (CP 10 10), Broad (CP 10 20), and Special (CP 10 30).
- Basic and Broad are named-peril; the insured must prove a listed peril caused the loss.
- Broad adds falling objects, weight of ice/snow/sleet, and water damage (plus a collapse additional coverage) to the Basic list.
- The Special Form is open-peril: covered unless excluded, shifting the burden of proof to the insurer; theft is covered only under Special.
- Memorize Special Form exclusions: ordinance/law, earth movement, water/flood, war, nuclear, utility, wear and tear, and mechanical breakdown.
Attaching Perils to the Coverage Form
The CP 00 10 describes what property is covered but says nothing about which perils apply. Perils come from a separate Causes of Loss form that the insured selects and attaches. ISO offers three principal options, in ascending order of breadth and price:
- Causes of Loss — Basic Form (CP 10 10)
- Causes of Loss — Broad Form (CP 10 20)
- Causes of Loss — Special Form (CP 10 30)
A fourth form, the Earthquake and Volcanic Eruption form (CP 10 40), adds those excluded perils separately.
Basic and Broad — Named Perils
Both Basic and Broad are named-peril forms: the insured must prove the loss was caused by a listed peril. The Broad Form is simply the Basic list plus three additions.
| Causes of Loss — Basic (CP 10 10) | Added by Broad (CP 10 20) |
|---|---|
| Fire | Falling objects |
| Lightning | Weight of snow, ice, or sleet |
| Explosion | Water damage (sudden/accidental discharge) |
| Windstorm or hail | (plus a collapse Additional Coverage) |
| Smoke | |
| Aircraft or vehicles | |
| Riot or civil commotion | |
| Vandalism | |
| Sprinkler leakage | |
| Sinkhole collapse | |
| Volcanic action |
A mnemonic many candidates use for the Basic perils is "WCSSHARVVF" plus sprinkler leakage and sinkhole. Broad adds the "3-W" items often summarized as falling objects, weight of ice/snow/sleet, and water damage, plus collapse.
Special Form — Open Perils (CP 10 30)
The Special Form is open peril (formerly "all-risk"): it covers direct physical loss to covered property unless the cause is specifically excluded. This shifts the burden of proof — the insured need only show a fortuitous direct loss; the insurer must prove an exclusion to deny. That reversal is the single most important distinction tested.
Key Special Form exclusions to memorize: ordinance or law, earth movement, governmental action, nuclear hazard, utility services, war, water (flood/sewer backup), wear and tear, mechanical breakdown, and dishonesty of the insured. Theft is covered by the Special Form (subject to certain sublimits), but theft is not covered under Basic or Broad.
The Burden-of-Proof Pivot
| Feature | Basic / Broad | Special |
|---|---|---|
| Peril structure | Named peril | Open peril |
| Burden of proof | Insured proves listed peril caused loss | Insurer proves an exclusion |
| Theft covered? | No | Yes (with sublimits) |
| Premium | Lower | Higher |
When an exam question describes a loss from an unusual or unnamed cause and asks whether it is covered, the answer hinges on the form: under Basic/Broad it is not covered unless named; under Special it is covered unless excluded.
The Three Causes of Loss Forms
Commercial property coverage is built by attaching one of three Causes of Loss forms to the BPP. They escalate in breadth exactly like dwelling/homeowners forms:
| Form | Basis | Scope |
|---|---|---|
| Basic (CP 10 10) | Named peril | Fire, lightning, explosion, windstorm/hail, smoke, aircraft/vehicles, riot/civil commotion, vandalism, sprinkler leakage, sinkhole collapse, volcanic action ("FLEXSAVR"-style list) |
| Broad (CP 10 20) | Named peril | Basic plus falling objects, weight of snow/ice/sleet, water damage (accidental discharge), collapse (additional coverage) |
| Special (CP 10 30) | Open peril | All risks of direct physical loss except exclusions; insurer bears burden of proving an exclusion |
Key Exclusions (All Forms)
Standard exclusions include flood/surface water, earth movement, war, nuclear, ordinance or law, wear and tear, and government action. The Special form also excludes specific causes (e.g., certain water, mold, dishonesty) and contains the anti-concurrent causation lead-in.
Theft Coverage
Theft is included under the Special form (subject to special limits on furs, jewelry, patterns, etc.) but is not automatically in Basic or Broad - a frequently tested gap.
Worked Example
A warehouse insured on the Broad form suffers roof collapse from weight of snow - covered, because Broad adds weight of ice/snow. The same warehouse later has stock stolen by a break-in. Under the Broad form, theft is not covered, so the burglary loss is denied; the insured needed either the Special Causes of Loss form or a separate Crime policy. This contrast - structural perils covered but theft excluded under Basic/Broad - is exactly the kind of fact pattern the exam uses to test form selection.
Special Form Burden of Proof and Sublimits
Under the Special (open-peril) Causes of Loss form, the insurer must prove an exclusion or limitation to deny a claim, whereas under Basic/Broad (named-peril) the insured must prove the loss came from a listed peril - the burden-of-proof shift is heavily tested. The Special form also carries limitations (not full exclusions): theft of certain property has a sublimit, and some causes (e.g., damage from steam-boiler explosion) are addressed by Equipment Breakdown coverage instead.
The exam also tests the Earthquake and Flood Causes of Loss forms, which are written separately because all three standard forms exclude earth movement and flood. Earthquake coverage typically carries a percentage deductible (e.g., 5%-10% of the limit) rather than a flat dollar amount, and a 72-hour clause treats multiple shocks within that window as one event - both recurring exam facts.
A warehouse roof collapses under the weight of accumulated snow, damaging stored inventory. The policy attaches the Causes of Loss - Basic Form (CP 10 10). Is the loss covered?
A retailer's stock is destroyed by an unusual cause not listed in any named-peril form and not specifically excluded. The policy carries the Causes of Loss - Special Form. Who bears the burden of proof regarding coverage?