What it does
ISO introduced three actual cash value (ACV) endorsements on a conditional mandatory basis – the carrier must attach one – to define how depreciation is taken when property is settled at actual cash value. BP 12 41 permits depreciation of materials and supplies and also labor and services. The more items that can be depreciated (labor, overhead and profit), the lower the ACV payment on a partial building loss. Kansas uses its own versions (BP 12 44–BP 12 46).
Filing and timing
ISO introduced this form in its 2026 Businessowners multistate endorsement filing (BP-2026-OFR26), with the 03 27 edition. Where approved, the filings carry an effective date of March 1, 2027 for new and renewal policies, so agents will see it on 2027 renewals with carriers that adopt it. State approval varies; some states rejected or replaced individual forms.
Quoting and selling notes
- Find out which of the three forms the carrier attaches; the difference can be large on partial losses.
- Where possible, keep buildings on replacement cost and consider agreed value (BP 04 83).
- ACV settlements apply when replacement cost conditions are not met or ACV was chosen.
