1. Forms
2. CP
3. CP-12-20

Form CP 12 20: Windstorm Or Hail - Exclusion Of Windstorm Or Hail Coverage For Trees, Shrubs Or Plants In The Open

1. What the Form Is

The CP 12 20 endorsement is a modification to a standard Commercial Property policy. Its primary function is to specifically exclude coverage for loss or damage to trees, shrubs, or plants located "in the open" when the cause of loss is windstorm or hail. Without this endorsement, a Commercial Property policy might provide some limited coverage for landscaping as part of the broader property definition or through specific additional coverages. This form carves out that potential coverage for these particular perils and items, meaning the insured will not be indemnified for direct damage to such plants from wind or hail.

2. Classes of Business It Applies To

This endorsement is typically used for businesses or organizations that have significant outdoor landscaping, especially in areas prone to windstorms or hailstorms. Its application aims to manage insurance costs or insurer exposure. Examples include:

• Golf Courses: For trees lining fairways, decorative shrubs around the clubhouse, etc.
• Commercial Real Estate: Office parks, shopping centers, apartment complexes with extensive landscaped grounds.
• Hospitality: Resorts and hotels with gardens, decorative trees, and plants on their premises.
• Nurseries and Garden Centers: For their own landscaping or display plants in open areas (note: this might not apply to their saleable stock, which could be covered differently, e.g., as inventory, depending on policy specifics).
• Municipalities or Public Entities: For trees and plants in parks or along streets, if covered under a commercial property policy.
• Farms/Agricultural Businesses: While crops are typically covered under specialized policies, this endorsement could apply to non-crop landscaping around farm buildings or operational areas.

For example, a coastal resort in a hurricane-prone region might have this endorsement to avoid significant premium hikes associated with covering extensive palm trees and tropical landscaping against wind damage.

3. Special Considerations

• "In the Open" Clarification: This is a key distinction. Plants inside a building, fully enclosed greenhouse, or atrium are not subject to this exclusion. The exclusion applies to vegetation exposed to the elements.
• Mandatory vs. Elective Use: While an insured might elect to add this endorsement to reduce their premium, insurers frequently mandate it in high-risk geographic zones (e.g., hurricane-exposed coastal areas, "Tornado Alley," hail-prone regions) as a condition of providing broader property coverage. This helps insurers manage their catastrophic loss exposure.
• Valuation and Replacement Cost: Mature trees and extensive landscaping can be very expensive and complex to value and replace. This endorsement removes that claims exposure for the perils of wind and hail.
• Debris Removal: A critical point of discussion. While the CP 12 20 excludes coverage for damage to the trees, shrubs, or plants themselves from wind/hail, the policy's standard Debris Removal additional coverage might still apply. If an excluded tree is damaged by wind and falls, damaging a covered building, the damage to the building would typically be covered. The cost to remove the tree from the covered building or to clear a blocked accessway to covered property may be covered up to the debris removal limit specified in the policy. However, if the tree simply falls in an open area without damaging other covered property, its removal cost is unlikely to be covered due to this endorsement.
• No Partial Peril Exclusion: The endorsement excludes both windstorm and hail. It cannot be used to exclude only one of these perils.

4. Key Information for Agents and Underwriters

• Risk Assessment:
  • Underwriters will scrutinize properties with high-value, extensive, or mature landscaping, especially in catastrophe-prone areas. The presence of such landscaping is a primary trigger for considering this endorsement.
  • Historical loss data for the specific property or similar businesses in the region due to wind/hail impacting landscaping will influence its requirement.
• Pricing/Premium Impact:
  • Attaching the CP 12 20 endorsement generally results in a premium credit or helps avoid a significant surcharge that would otherwise be necessary if the landscaping exposure were covered for wind and hail.
  • Agents should clearly communicate this as a cost-management strategy for the insured, trading premium savings for the assumption of this specific risk.
• Coverage Gap Communication (E&O Best Practice for Agents):
  • It is crucial for agents to thoroughly explain to the insured that this endorsement means there is no coverage for windstorm or hail damage to their outdoor trees, shrubs, and plants.
  • This discussion should be documented to prevent errors and omissions (E&O) claims. The insured needs to understand they are self-insuring this specific exposure.
• Underwriting Guidelines:
  • Insurers often have specific underwriting rules dictating when the CP 12 20 is mandatory based on factors like geographic territory, proximity to coast, storm deductibles in place, and the overall value and nature of the landscaping.
  • This endorsement allows underwriters to provide terms on risks they might otherwise decline or price much higher due to the unpredictable and potentially widespread nature of landscaping damage from wind and hail.
  • Confirm that the application of "in the open" is clear and consistently applied.