1. Forms
2. CP
3. CP-19-10

Form CP 19 10: Schedule Of Additional Coverages / Your Business Personal Property - Separation of Coverage

1. What the form is

The Form CP 19 10, often titled "Schedule Of Additional Coverages" or more specifically identified by its function as "Your Business Personal Property - Separation of Coverage," is an endorsement used in Commercial Property policies. Its primary purpose is to allow an insured to list specific categories of Business Personal Property (BPP) and assign distinct coverage terms to them, separate from the general BPP coverage. This means that for the property scheduled on the CP 19 10, the insured can choose a specific limit of insurance, a different Cause of Loss form (e.g., Basic, Broad, or Special), and a distinct coinsurance percentage. Importantly, any property listed on this schedule is removed from the blanket coverage provided for Business Personal Property in the main policy form, and its value is not included in the coinsurance calculation for the remaining BPP. Instead, the scheduled items are subject to their own, separate coinsurance calculations.

2. Classes of business it applies to

This form is versatile and can be beneficial for a wide range of commercial enterprises that have diverse types of Business Personal Property requiring tailored coverage. It is particularly useful in the following scenarios:

• Businesses with varied BPP exposures: Companies that own distinct categories of personal property with different risk profiles or values. For instance, a business might have standard office furniture and supplies, but also highly specialized or valuable machinery and equipment.
  • Real-world example: A manufacturing facility could use CP 19 10 to schedule its critical production machinery for a higher limit and under a Special Cause of Loss form, while its general office contents are covered for a lower limit and perhaps a Broad Cause of Loss form.
• Tenants with significant Improvements and Betterments (TIBs): When a tenant has invested substantially in TIBs and wishes to insure them specifically, or is required by lease to do so. This form allows TIBs to be scheduled with their own limit and coverage terms.
  • Real-world example: A restaurant leasing space in a commercial building makes $150,000 in improvements (custom kitchen, high-end fixtures). The tenant can use CP 19 10 to schedule these TIBs, ensuring they have a dedicated limit and potentially different coverage terms than their other BPP like food stock or movable equipment. This is also crucial if they need to add an endorsement like CP 04 26 (Ordinance or Law Coverage For Tenant's Interest in Improvements & Betterments), which often requires TIBs to be separately scheduled.
• Specific Property Categories: ISO rules allow for the separate scheduling of various BPP categories, including:
  • Stock
  • Contents except stock
  • Machinery and equipment
  • Furniture
  • Fixtures
  • Tenant's Improvements and Betterments
  • Fixtures, improvements, and alterations owned by insureds as unit-owners (as covered under Form CP 00 18 Condominium Commercial Unit-Owners Coverage Form).

3. Special considerations

• Removal from Blanket BPP: It is crucial to understand that property scheduled on CP 19 10 is no longer covered under the general BPP limit shown on the declarations page. The limit specified on the CP 19 10 for that item becomes the sole limit available for it.
• Adequacy of Limits and Coinsurance: Since scheduled items have their own limits and coinsurance requirements, these must be carefully selected to ensure they are adequate for the value of the property. Failure to insure to the selected coinsurance percentage can result in a penalty at the time of loss for that specific item.
• Interaction with Other Endorsements: The use of CP 19 10 can be a prerequisite for, or interact with, other endorsements. For example, ISO's Commercial Property Rule 32.F.2. regarding endorsement CP 04 26 (Ordinance or Law Coverage For Tenant's Interest in Improvements & Betterments) states that TIBs should not be part of an item also covering personal property under a blanket amount if CP 04 26 is added, often necessitating the use of CP 19 10 to separate the TIBs.
• Exclusionary Function: If a category of BPP is not listed with a specific limit on the CP 19 10 (when the form is used to define all BPP coverage components), it may effectively be excluded from coverage at the specified locations.
• Real-world example: A business schedules its "Stock" on CP 19 10 for $200,000 with an 80% coinsurance clause and "Special Form" coverage. The actual value of their stock at the time of loss is $300,000. They should have insured it for at least $240,000 (80% of $300,000). If a $60,000 stock loss occurs, they would face a coinsurance penalty ($200,000/$240,000 * $60,000 = $50,000, before deductible), because the stock is evaluated against its own specific terms on the CP 19 10, not the general BPP limit.

4. Key information for agents and underwriters

• Pricing: The ability to specify different Causes of Loss forms, limits, and coinsurance percentages for distinct property categories allows for more granular and potentially more accurate premium allocation. Agents can offer more customized coverage solutions.
• Risk Assessment: Underwriters must evaluate each scheduled item's exposure individually. This necessitates detailed information from the insured regarding the nature, value, and specific risks associated with each separated property category. Standard underwriting guidelines for the chosen Cause of Loss form will apply to the scheduled property.
• Coverage Gaps: Agents have a critical role in ensuring that separating BPP onto CP 19 10 does not create unintended coverage gaps. The limits for scheduled items must be carefully reviewed for adequacy, and the remaining BPP coverage (if any) must still appropriately cover all other unscheduled business personal property.
• Underwriting Guidelines:
  • Underwriters will assess the rationale for separating coverages to prevent adverse selection (e.g., insuring only high-risk items with broad coverage while leaving lower-risk items underinsured or with minimal coverage).
  • Detailed inventories, valuations, and potentially appraisals may be required for items scheduled on CP 19 10, especially for high-value or specialized property.
  • The use of CP 19 10 should