1. Forms
2. CP
3. CP-14-20

Form CP 14 20: Additional Covered Property

The CP 14 20 Additional Covered Property endorsement is a crucial tool within Commercial Property insurance. Its primary function is to modify the standard Building and Personal Property Coverage Form (CP 00 10) or other commercial property forms by adding specific items or types of property to the definition of "Covered Property." Essentially, it allows businesses to gain coverage for property that would otherwise be excluded or not explicitly covered under the base policy. This is achieved by scheduling the specific property on the endorsement, thereby bringing it within the scope of coverage.

Classes of Business and Real-World Examples

This endorsement is versatile and can be beneficial across a wide range of industries. Any business that owns or is responsible for property not automatically covered by the standard CP 00 10 may need this endorsement. Here are some examples:

• Real Estate and Property Management: A building owner might have detached structures like fences, retaining walls, or underground pipes that are typically excluded. The CP 14 20 can add these back as covered property. For instance, a commercial landlord might use this form to ensure coverage for a significant, ornate fence surrounding their office park.
• Manufacturing and Industrial: Businesses with specialized machinery or equipment foundations below the lowest basement floor or ground surface might find these excluded. This endorsement can specifically add coverage for these critical assets. Imagine a factory with essential underground conduits for its manufacturing process; the CP 14 20 could provide coverage for these.
• Retail and Hospitality: Businesses with valuable outdoor fixtures, such as specialized signage not attached to the building or unique landscaping features that go beyond standard "lawn" coverage, could use this endorsement. For example, a resort might want to specifically cover an expensive, custom-built gazebo on its grounds.
• Condominium Associations: When used with the Condominium Association Coverage Form (CP 00 17), this endorsement can extend protection to fixtures, improvements, alterations, and appliances within individual units if the association agreement requires the association to insure them.
• Businesses with Animals (Non-Stock): While animals held as "stock" (e.g., in a pet store) might have some coverage, other animals owned by the business (e.g., a guard dog for a commercial yard, not boarded) are typically excluded. The CP 14 20 could potentially be used to add coverage for such an animal, subject to underwriter approval.

Special Considerations

There are several important points to consider when utilizing the CP 14 20:

• Specificity is Key: The endorsement requires the insured to specifically list the property they wish to add. Vague descriptions can lead to coverage disputes.
• Not a Cure-All for All Exclusions: While this form can add back many types of property listed in the "Property Not Covered" section of the CP 00 10, it doesn't override all exclusions. For example, it generally cannot be used to cover contraband or property in the course of illegal transportation.
• Interaction with Other Forms: It's crucial to understand how this endorsement interacts with the base policy (e.g., CP 00 10) and other potential endorsements. For instance, if property is more specifically described and covered under another policy, the CP 00 10 typically provides only excess coverage.
• Valuation and Limits: The value of the property added via the CP 14 20 should be included in the overall policy limits and considered for coinsurance calculations to avoid penalties. The endorsement clarifies that these items are intended to be covered and included in coinsurance considerations.
• Underwriter Approval: Adding property via this endorsement is subject to underwriter review and approval, and an additional premium will likely apply.
• Distinction from CP 14 15 (Additional Building Property): While both endorsements deal with property, the CP 14 15 is used to clarify that certain property (which could be considered either real or personal) is to be specifically covered as "Building." The CP 14 20, on the other hand, adds property that is otherwise not covered.
• Use for Tenants' Improvements and Betterments (TIBs): In situations where a building owner wants to exclude TIBs from their building coverage (perhaps because the tenant is responsible for insuring them), the CP 14 20 can be used to remove TIBs from the definition of covered property on the building owner's policy. This helps avoid the building owner's policy responding to, and their values being included in, the coinsurance calculation for property they don't intend to cover.

Key Information for Agents and Underwriters

Agents and underwriters should pay close attention to the following when dealing with the CP 14 20:

• Thorough Risk Assessment: Agents should meticulously review the "Property Not Covered" section of the CP 00 10 with their clients to identify any potential coverage gaps that the CP 14 20 could address. This includes discussing items like foundations, underground pipes, fences, and detached retaining walls.
• Accurate Scheduling: Ensure that any property added via this endorsement is clearly and accurately described in the schedule. Ambiguity can lead to claim denials or disputes.
• Pricing Considerations: Underwriters will need to assess the increased exposure presented by the added property. This involves evaluating the type, value, location, and susceptibility to loss of the scheduled items. The premium will be adjusted accordingly.
• Addressing Coinsurance: By adding property, the total insurable value increases. Agents must advise clients to adjust their policy limits to comply with coinsurance requirements and avoid underinsurance penalties.
• Identifying "Hidden" Exposures: Some property exclusions might not be immediately obvious to clients. For example, the cost of excavations, grading, or backfilling is typically not covered. If a client has significant, valuable landscaping that involved extensive earthwork they wish to protect, this endorsement might be considered, though coverage for land itself remains a general exclusion.
• Alternative Solutions: In some cases, other endorsements or even separate policies (e.g., an Inland Marine policy for certain types of mobile or specialized equipment) might be more appropriate than the CP 14 20. Agents should explore all available options.
• Documentation: Underwriters should ensure that the rationale for adding specific properties is well-documented in the underwriting file, along with any specific conditions or limitations applicable to that added property.

In essence, the CP 14 20 Additional Covered Property endorsement provides a valuable mechanism for tailoring commercial property coverage to meet the specific needs of a business, ensuring that unique or otherwise excluded property items can be adequately protected.