1. Forms
2. CM
3. CM-99-01

What the form is

The CM 99 01 Additionally Covered Property endorsement is designed to broaden the scope of covered property under certain Commercial Inland Marine coverage forms, most notably the Equipment Dealers Coverage Form (CM 00 22) and the Camera and Musical Instrument Dealers Coverage Form (CM 00 21). Its primary function is to provide coverage for business personal property that is not considered the dealer's stock-in-trade or merchandise held for sale but is essential for the operation of the business. This can include furniture, fixtures, office supplies, machinery, tools, fittings, patterns, dies, molds, models, and the insured's interest in improvements and betterments to a building they do not own.

Classes of business it applies to

This endorsement is specifically used for businesses that are eligible for coverage under the Equipment Dealers or Camera and Musical Instrument Dealers forms. Examples include:

• Camera Stores: A photography shop might use this endorsement to cover their display counters, shelving units, computers used for sales and inventory, and specialized equipment used for minor repairs or photo processing, separate from their inventory of cameras and accessories.
• Musical Instrument Dealers: A store selling musical instruments could use CM 99 01 to insure their office furniture, soundproof demonstration rooms (as improvements and betterments if they lease the space), and tools used for instrument repair.
• Equipment Dealers: A business that sells or leases heavy machinery (e.g., construction or agricultural equipment) would use this endorsement to cover items such as their office desks and chairs, diagnostic machinery and tools used for servicing the equipment, and any non-permanent fixtures they have installed in their showroom or service bays.

Special considerations

• Declarations Requirement: For coverage to apply under this endorsement, the Declarations page of the policy must specifically list the types of additionally covered property, the applicable premises, and a separate limit of insurance for this property.
• Coinsurance: The endorsement has its own coinsurance provisions, which means the insured must carry an adequate amount of insurance for this additionally covered property (usually a percentage of its value, such as 80% or 90%) to avoid a penalty in the event of a partial loss.
• Protective Safeguards: If the insured has declared that certain protective safeguards (like alarm systems or sprinkler systems) are in place for the covered property, failure to maintain these safeguards in working order can lead to a suspension of coverage for losses that these safeguards would have prevented. For example, if a declared burglar alarm is not operational and a theft occurs, the claim for the stolen additionally covered property might be denied.

Key information for agents and underwriters

• Agents: It is crucial for agents to discuss with their clients the types of property that fall outside the standard definition of "stock" or "merchandise" and ensure these are properly identified and scheduled on the CM 99 01 endorsement with adequate limits. They should also explain the coinsurance clause and the importance of maintaining any declared protective safeguards.
• Underwriters: Underwriters need to assess the specific risks associated with the additionally covered property. The nature and value of items like machinery, tools, or specialized fixtures can vary significantly. They should verify that the limits requested are appropriate and that the coinsurance requirements are understood. The presence and reliability of protective safeguards should be a key underwriting consideration, potentially impacting pricing or eligibility. They should also ensure the Declarations clearly reflect what property is covered under this endorsement to avoid ambiguity at the time of a claim.