What it does
BP 10 03 extends the BOP's covered causes of loss to include earthquake and volcanic eruption, which BP 00 03 otherwise excludes under earth movement. ISO also has a sub-limit version and a sprinkler leakage – earthquake extension in the program.
Who needs it
Building owners and tenants in seismic zones (West Coast, Pacific Northwest, Alaska, New Madrid area), lenders requiring quake cover, and owners of unreinforced masonry or older buildings.
Key provisions
- All earthquake shocks or volcanic eruptions within any 168-hour period count as a single event, which matters for the deductible and limit.
- Under this endorsement the insurer does not pay for fire, explosion (other than volcanic), landslide, mine subsidence, tidal wave, tsunami, flood, mudslide or mudflow, even if attributable to the earthquake; fire following an earthquake is handled under the base policy.
- An earthquake that begins before inception is not covered.
- The 01 06 edition was titled simply "Earthquake"; the current edition carries the volcanic eruption wording in its title.
Quoting and selling notes
- Show the client the earthquake deductible that applies on the carrier's schedule in dollars for each building.
- Ask whether the client wants business income for quake losses and whether sprinkler leakage caused by an earthquake should be added.
Related forms
BP 00 03; Sprinkler Leakage – Earthquake Extension BP 10 10.
