What it does
CP 10 45 adds Earthquake and Volcanic Eruption as Covered Causes of Loss for property and coverages that have an Earthquake – Volcanic Eruption Limit of Insurance in the Earthquake – Volcanic Eruption Coverage Schedule (CP DS 06) or the Declarations. All shocks or eruptions within 168 hours are one event. Instead, the schedule can provide Earthquake – Sprinkler Leakage Only.
It is a sub-limit form. The earthquake limit is separate from, and usually lower than, the property limits. Coverage can be set as a blanket limit or as separate limits for buildings, BPP, business income and extra expense.
Key provisions
- The earth movement exclusion does not apply to the extent it conflicts, and collapse caused by earthquake is covered under this endorsement.
- Exclusions remain for tidal wave or tsunami, earthquakes beginning before inception, ordinance or law (unless separately endorsed), and land restoration.
- Exterior masonry veneer on wood-frame walls is excluded unless the "Including Masonry Veneer" option applies or veneer is under 10% of the wall area.
- No coinsurance applies to the earthquake coverage.
- A property damage percentage deductible is shown in the schedule.
Editions
The 10 12 edition title is "Earthquake And Volcanic Eruption Endorsement (Sub-Limit Form)". An older 08 99 edition also appears on policies. ISO revised the earthquake forms again in the 02 19 cycle (CP 10 40 02 19, for example), so a newer edition of this form may be in use.
Quoting and selling notes
- Earthquake capacity is expensive. Sub-limits are often sized to a probable maximum loss study rather than total values.
- Explain how the percentage deductible is calculated and that it applies per building and per item.
