Virtual University | Endorsements

4 Commercial Property Endorsements You’ve Never Heard Of But Should Know How to Use

ISO offers over 200 commercial property endorsements. Some of them are not good for the insured, but many allow the insured to provide coverage and protection not found in the unendorsed property policy. There are four you may have never heard of or seen used, but they are incredibly useful in the right situation.

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Building Codes Turn Partial Property Losses into Total Losses

Few commercial structures fully meet the applicable jurisdictional building codes and regulations of the county, city, town, borough, village or township in which they are located. Building codes are routinely reviewed, revised and updated, usually a result of newly developed technology or advances in construction methodologies or materials. Noncompliance has the potential to cost your insured building owner thousands of dollars in out-of-pocket expenses following a 'major' property loss. Ordinance or law endorsements are designed to fill coverage gaps existing in the unendorsed commercial property policies and business income forms related to the additional costs and time associated with the enforcement of changes in local building codes.

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ISO's Business Income Response to COVID-19

Insurance Services Office (ISO) continually monitors emerging issues and trends that may affect the insurance industry, and the unknown ultimate result of the Coronavirus (COVID-19) certainly qualifies as an emerging issue. In response to the Coronavirus, and because many if not most policies contain a virus exclusion, ISO created two business income endorsements to specifically respond to the Coronavirus.

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Margin Clauses and Blanket Insurance

Commercial insurers have increasingly incorporated provisions into their coverage forms and/or endorsements that can create significant coverage gaps when property is insured on a blanket basis. The use of a margin clause places a cap on how much an Agreed Value option will pay on a blanket policy. In addition, a margin clause also functions with coinsurance, where applicable. This article explains the danger with real life, tangible examples.

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Ordinance or Law - When (and Why) Partial Losses Become Total Losses

We do a bad job of explaining the concept of 'replacement cost' and tend to tell clients they will get new stuff for old junk. This may be partially true, but partial truths will get you sued.

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Business Income vs. Manufacturer's Selling Price

An agent asks, 'I'm quoting a tank fabrication operation. They manufacture large metal tanks at their facility, transport the tanks to the customer’s location, and install them. The current agent includes business income coverage, but I think there is still a gap if these very expensive completed tanks are destroyed while still at the insured’s location awaiting transport and installation. Am I right and is there a solution?'

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Loss Payee vs. Lenders Loss Payable

Sometimes a third party wants to be added as a named insured on a property policy, but the insurer refuses. As an alternative, the party elects to be named as a loss payee. ISO and carriers may have options for naming such parties as loss payees or covering them under a lenders loss payable clause. Which is better?

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Margin Clauses

Blanket insurance is often the most effective and safest way to write property insurance on risks with multiple locations. Since the limit can be applied to any location, it lessens the likelihood of inadequate insurance due to fluctuating values. However, there appears to be an increasing use of margin clauses that limit coverage at a specific location to a percentage of the statement of values entry for that location. Here's why you should be concerned....

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TRIA and the ISO Terrorism Exclusion Endorsements

Following a brief history of the Terrorism Risk Insurance Act (TRIA), this article provides a complete listing to date of all the ISO terrorism endorsements, along with links to other useful sources of TRIA information and/or updates. Included are samples of the actual forms and descriptions of the original 2002 editions.

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