What it does
CP 10 34 applies to the rental units described in its Schedule and the buildings containing them. It excludes loss or damage caused by smoke, vapor, gas or any substance released in the course of production or processing operations at those units. The exclusion applies whether the operations are legal or illegal, permitted or prohibited by the lease, or usual for the occupancy. Fire or explosion resulting from the release of a by-product is still covered.
Key provisions
- Business income and extra expense resulting from the excluded damage are also excluded under the listed time-element forms and any other business interruption coverage in the policy.
- A tenant's production or processing operations are not considered vandalism of the rental premises. This closes the argument that contamination by a tenant's operation is "willful and malicious" damage.
- It applies to CP 00 10, CP 00 30, CP 00 32, CP 00 50 and the Standard Property Policy.
Who sees it
Landlords, often of residential or mixed-use rental property, after insurers saw contamination claims from tenant-run operations such as drug manufacturing or cultivation.
Quoting and selling notes
- Explain that tenant-caused contamination cleanup would be uninsured at the scheduled units. Stress tenant screening and periodic inspections.
- Check lease provisions and security deposits as risk-transfer tools.
