1. Forms
2. FL
3. FL-05-32

What the Form Is

The FL 05 32, titled "Limited Fungi or Bacteria Coverage Liability," is an endorsement used with farm liability insurance policies. Its primary function is to address the significant exposure of losses related to fungi (including mold) and bacteria. The form operates by initially excluding liability coverage for bodily injury or property damage arising from fungi or bacteria. However, it then gives back a specific, limited amount of coverage, subject to an aggregate limit shown in the schedule of the endorsement. This provides a measure of protection, albeit restricted, as an alternative to a complete exclusion of this type of risk, such as that found in form FL 10 35.

Classes of Business It Applies To

This endorsement is specifically designed for the farm and agricultural sector. It applies to various farm liability policies where exposure to fungi or bacteria could lead to third-party claims. Real-world examples include:

• A farm where mold growth in a barn allegedly causes respiratory problems for a visitor (bodily injury).
• Contamination of a neighbor's property due to the spread of fungi or bacteria from the insured's farm operations (property damage).
• Liability claims arising from bacteria in farm products, although the form notes an exemption for food poisoning.

Special Considerations

There are several important considerations when using the FL 05 32 endorsement:

• Limited Coverage: The coverage provided is subject to a specific aggregate limit stated in the endorsement. This limit is the maximum the insurer will pay for all fungi or bacteria incidents during the policy period, regardless of the number of claims.
• Alternative to Full Exclusion: This form offers a middle ground between no coverage and broader coverage for fungi/bacteria. It's often used when a complete exclusion (like FL 10 35) is deemed too restrictive, but the insurer is unwilling to provide broader coverage for this high-risk exposure.
• "Fungi or Bacteria Incident": The forms addressing fungi and bacteria often introduce specific definitions like "fungi or bacteria incident," which dictates how the aggregate limit applies.
• Food Poisoning Exemption: The search results indicate that liability related to food poisoning is typically an exception to the limitations or exclusions for fungi/bacteria.

Key Information for Agents and Underwriters

Agents and underwriters should be aware of the following when dealing with FL 05 32:

• Risk Assessment: Underwriters must carefully assess the individual farm's exposure. This includes factors like the type of farming operations (e.g., dairy, crop, livestock), the age and condition of buildings, climate conditions, and the insured's maintenance and hygiene practices.
• Client Communication: Agents need to clearly explain the limitations of this endorsement to their farm clients, particularly the aggregate limit and the fact that it's a 'buy-back' of coverage after an initial exclusion. Ensure the client understands this is not comprehensive mold coverage.
• Pricing: The premium for this endorsement should reflect the limited risk transfer.
• Coverage Gaps: Be aware that even with this endorsement, significant coverage gaps for fungi and bacteria related losses can remain, especially for large-scale contamination events.
• Edition Dates: The form has at least two edition dates, '12 02' and an '04 16' version described as an editorial change. While described as editorial, it's always prudent to review the specific language of the edition being used.
• Interaction with Other Forms: This endorsement is part of a suite of forms developed by ISO to address fungi and bacteria across farm property (FP 05 30, FP 05 31) and liability (FL 05 32, FL 10 35) and farm umbrella policies (FB 10 14). Understanding how these forms interact is crucial for comprehensive risk management.