Like all property insurance policies, the Business Personal Property (BPP) policy imposes a number of duties on the insured. Insurance attorneys will tell these duties constitute conditions precedent to coverage; that is, the insured must comply with these requirements before the insurance company is obligated to pay any loss. This requirement was made clear in the 1999, 5th Circuit opinion styled, Griggs v. State Farm Lloyds. These duties generally include:
- the insured must provide notice to the insurer of the loss
- the insured must preserve the property as much as possible
- the insured must allow an inventory and inspection of the property
- the insured is required to submit a proof of loss
- the insured must submit to an examination under oath if requested.
The commercial property “cause of loss form” identifies the types of loss covered by the particular policy. The insured selects and pays a premium based upon the particular “cause of loss form” provided by the insurer to insure against certain types of loss applicable to the property in question. The “special form” covers “all risk” of loss unless such loss is specifically excluded by the policy. The “broad form” covers fifteen specifically named perils or causes of loss. The “basic form” covers eleven specifically named perils.
The “cause of loss basic form” specifically lists the cause of loss covered by the insuring agreement. The covered perils include:
- fire
- lightning
- explosion
- windstorm or hail
- smoke
- aircraft or vehicles
- riot or civil commotion
- vandalism
- sprinkler leakage
- sinkhole collapse
- volcanic action
If any event or accident causes a loss other than these named perils, then the loss is not covered.
The “cause of loss broad form” insuring agreement covers all of the specified cause of loss covered by the basic form and also covers four additional perils:
12) breakage of glass
13) falling objects
14) weight of snow, ice or sleet
15) water damage