15.2 Section I – Property Coverages

Section I – Property provides the property coverage under the Businessowners Policy (BOP). The standard BOP is written on an open perils basis, covering all direct physical losses unless specifically excluded or limited. A named perils option is also available by endorsement.

Definitions

Specified Causes of Loss

Although the Businessowners Policy (BOP) generally provides open perils coverage, some coverages apply only when the loss is caused by specified causes of loss. These specified perils include:

Specified Causes of Loss	Specified Causes of Loss	Specified Causes of Loss
Fire or lightning	Windstorm or hail	Explosion
Riot or civil commotion	Aircraft	Vehicles
Smoke	Vandalism	Sinkhole collapse
Volcanic action	Falling objects	Weight of snow, ice, or sleet
Leakage from fire extinguishing equipment	Water damage (accidental discharge of water or steam from a system or appliance)

Covered and Excluded Property

Many of the Section I definitions identify and explain the types of property covered throughout the Businessowners Policy (BOP).

Money includes currency, coins, bank notes, traveler’s checks, cashier’s checks, and money orders.

Securities are negotiable or non-negotiable instruments or contracts that represent money or property, such as tokens, tickets, stamps, and evidence of debt.

Valuable papers and records include documents, manuscripts, records, abstracts, books, deeds, drawings, films, maps, and mortgages. Money and securities are not included in this definition.

• Computers are programmable electronic devices used to store, retrieve, and process data. Coverage includes related peripheral equipment, such as printers, but does not cover computers that operate production machinery or equipment.
• Electronic data is information, facts, or computer programs stored on, created by, used on, or transmitted through electronic media, such as software, tapes, drives, cells, and other storage devices.

Stock includes merchandise held for storage or sale, raw materials, work in process, finished goods, and packing and shipping supplies.

Pollutants

Pollutants are any solid, liquid, gaseous, or thermal irritants or contaminants, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste also includes materials that are recycled, reconditioned, or reclaimed.

Operations

Operations refers to the insured's business activities conducted at the described premises.

Coverage

Covered Property

Like other commercial property policies, the Businessowners Policy (BOP) provides coverage for both the building and business personal property.

Building coverage applies to the building and structures listed in the Declarations, including:

• Completed additions
• Fixtures, including outdoor fixtures
• Permanently installed machinery and equipment
• The insured's property used to maintain or service the building or premises, including:
  • Firefighting equipment
  • Outdoor furniture
  • Floor coverings
  • Appliances used for refrigeration, ventilation, cooking, dishwashing, or laundering
• If the insured is a landlord: personal property located in apartments, rooms, or common areas
• If not covered by other insurance: buildings under construction, alterations, repairs, and related materials, equipment, supplies, and temporary structures located on or within 100 feet of the described premises

Business personal property coverage applies to property located in or on the described premises, or in the open or in a vehicle within 100 feet of the premises, including:

• Property the insured owns and uses in the business
• Property of others in the insured's care, custody, or control
• Leased personal property the insured is legally responsible to insure
• Tenant's improvements and betterments (fixtures, alterations, installations, or additions made to a building the insured occupies but does not own)
• If the insured is a tenant and there is no building coverage limit: exterior building glass owned by the insured or in the insured's care, custody, or control

Property Not Covered

Property Not Covered

The Businessowners Policy (BOP) has fewer Property Not Covered exclusions than the standard Commercial Property form because many higher-risk businesses are not eligible for BOP coverage. Covered property does NOT include:

• Money or securities, except under Optional Coverages
• Accounts, bills, food stamps, evidence of debt, accounts receivable, or valuable papers and records, except as otherwise covered
• Aircraft, automobiles, motor trucks, and other vehicles subject to registration
• Watercraft and related equipment while afloat
• Computers permanently installed in aircraft, watercraft, or registered vehicles
  • Exception: Computers held as stock are covered
• Electronic data, except under Additional Coverages
  • Exception: Prepackaged software held as stock and data built into the building's elevator, lighting, HVAC, or security system are covered
• Land, water, growing crops, and lawns
• Outdoor fences; radio/TV antennas, satellite dishes, lead-in wiring, masts, towers; and trees, shrubs, and plants, except under Coverage Extensions
• Outdoor signs not attached to a building, except under Coverage Extensions or Optional Coverages
  • Exception: Building-mounted signs are covered, subject to the policy limit
• Animals
  • Exception: Animals owned by others and boarded by the insured, and animals held as stock inside buildings, are covered
• Contraband or property involved in illegal transportation or trade

Limitations

The policy does not cover damage to steam boilers, steam pipes, steam engines, steam turbines, or hot water boilers caused by an internal condition or event.

• Exception: Damage caused by an internal explosion (such as a gas explosion inside the furnace) is covered.

The policy does not cover:

• Missing property when the only evidence is an inventory shortage with no physical evidence of loss.
• Property transferred because of unauthorized instructions (such as fraudulent transfer requests). Exception: This limitation does not apply to the Money and Securities Optional Coverage.

Damage to the interior of a building (such as rain damage to floors) is covered only if:

• The exterior of the building is first damaged, allowing the rain to enter, or
• The damage results from the thawing of snow, sleet, or ice on the building.

The policy limits theft coverage for the following property:

• $2,500 – Furs, fur garments, and garments trimmed with fur
• $2,500 – Jewelry, watches, pearls, precious and semiprecious stones, bullion, gold, silver, platinum, and other precious metals or alloys
• $2,500 – Patterns, dies, molds, and forms

Animals and fragile articles (such as glassware, statuary, and marble) are covered only for specified causes of loss and building glass breakage.