What are the different Cause of Loss/Coverage forms?
In insurance, Cause of Loss Forms (also known as Coverage Forms) specify the types of perils or causes of loss that are covered under a particular policy. There are three main types of Cause of Loss Forms: Basic, Broad, and Special. Each form provides coverage for different sets of perils, offering varying levels of protection to the insured property. Agents should always refer to the carrier's individual forms first, as these are general guidelines, and all carriers include different coverages and exclusions.
Basic Form (CP 10 10) - Named Perils Coverage
The Basic Form provides coverage for a specific list of perils or causes of loss that are explicitly named in the insurance policy. Typical perils covered under a Basic Form include fire, lightning, explosion, windstorm, hail, smoke, vandalism, and theft.
This form offers relatively limited coverage compared to the other two forms. It only protects against the perils specifically listed in the policy. Any peril not explicitly mentioned in the policy is not covered.
Common Perils Covered (Make sure to check with each carrier)
Fire
Lightning
Explosion
Windstorm or Hail
Smoke
Aircraft or Vehicles
Riot or Civil Commotion
Vandalism
Sprinkler Leakage
Sinkhole Collapse
Volcanic Action
Broad Causes of Loss Form (CP 10 20) - Named Perils Plus Coverage
The Broad Form expands upon the coverage provided by the Basic Form by including additional named perils beyond those listed in the Basic Form. In addition to the perils covered under the Basic Form, the Broad Form may include perils such as falling objects, weight of ice, snow, or sleet, water damage from plumbing, and electrical damage.
This form offers broader protection than the Basic Form, as it covers a wider range of specified perils. However, like the Basic Form, any peril not specifically named in the policy is not covered.
Common Perils Covered (Make sure to check with each carrier)
Fire
Lightning
Explosion
Windstorm or Hail
Smoke
Aircraft or Vehicles
Riot or Civil Commotion
Vandalism
Sprinkler Leakage
Sinkhole Collapse
Falling Objects
Water Damage
Ice/Snow/Sleet
Electrical Damage
Special Causes of Loss Form (CP 10 30) - Open Perils or All Risks Coverage
The Special Form, also known as Open Perils or All Risks Coverage, provides the broadest level of coverage among the three forms. Instead of specifying the perils covered, the Special Form provides coverage for all perils except those that are specifically excluded in the policy.
This form offers the most comprehensive protection, as it covers any cause of loss that is not expressly excluded in the policy. However, it's important for insured parties to carefully review the policy exclusions to understand what risks are not covered.
(Make sure to check with each carrier)
Agents and insured parties must carefully consider the insured property's specific needs and risk exposures when selecting the appropriate Cause of Loss Form. It's important to note that these are general guidelines, and different carriers include various coverages and exclusions. Each form offers a different balance between coverage breadth and cost, and the choice should align with the insured's risk tolerance and budget.
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