1. Forms
2. HO
3. HO-07-57

What the form is

The HO 07 57, titled "Special Coverage For Valuable Papers And Records," is an endorsement to a Homeowners policy. Its primary purpose is to broaden the coverage for valuable papers and records related to an insured's home-based business that is covered under the HO 07 01 (Home Business Insurance Coverage) endorsement. Standard homeowners policies, even with a basic home business endorsement, often provide limited coverage for business-related valuable papers, typically on a named perils basis and with a sub-limit. The HO 07 57 changes the coverage for these items to an 'all-risk' or special perils basis, meaning it covers direct physical loss from any cause unless specifically excluded in the endorsement or policy. This endorsement also clarifies that coverage applies not only to valuable papers owned by the insured but also to those in the insured's care, custody, or control.

Classes of business it applies to

This endorsement is specifically designed for individuals who operate an eligible business from their residence and have the HO 07 01 endorsement attached to their Homeowners policy. It is particularly relevant for home-based businesses where the loss or damage to valuable papers and records could result in significant financial loss or operational disruption. Examples include:

• Home-based accountants or bookkeepers (client records, financial statements)
• Writers, researchers, or consultants (manuscripts, research data, client project files)
• Architects or designers working from home (blueprints, design specifications)
• Home-based businesses that maintain important customer lists, historical records, or other critical documents.

Special considerations

Key considerations for the HO 07 57 endorsement include:

• Prerequisite Endorsement: It must be used in conjunction with the HO 07 01 (Home Business Insurance Coverage) endorsement. The HO 07 57 modifies the valuable papers and records coverage provided within the HO 07 01.
• Shift to 'All-Risk' Coverage: It significantly enhances protection by moving from named perils (covering only specified causes of loss) to special perils (covering all causes of loss not excluded).
• Coverage Limit: While this endorsement broadens the perils, the actual limit of liability for valuable papers and records is typically specified in the schedule of the HO 07 01 or this endorsement. It's important to ensure this limit is adequate for the insured's exposure. Endorsement HO 07 56 can be used to increase this limit.
• Exclusions: As with any special perils coverage, there are exclusions. Common exclusions might include errors or omissions in design, inherent vice, or losses due to electrical or magnetic injury to electronic data (though physical records are the primary focus).
• Care, Custody, or Control: The inclusion of coverage for non-owned papers in the insured's care, custody, or control is an important feature for businesses that handle client documents.

Key information for agents and underwriters

For insurance agents and underwriters, the HO 07 57 presents several practical points:

• Risk Assessment: When an insured has a home-based business (covered under HO 07 01), agents should inquire about the nature and value of their business-related papers and records. This helps determine if the standard HO 07 01 coverage is sufficient or if the broader protection of HO 07 57 is warranted.
• Explaining the Benefit: Agents should clearly explain the advantage of 'all-risk' coverage compared to named perils, especially for critical business documents.
• Adequacy of Limits: Underwriters and agents need to work with the insured to establish an appropriate coverage limit for valuable papers and records. This might involve discussing the cost to reproduce or reconstruct these documents.
• Underwriting Guidelines: Underwriters will consider the type of home business. Businesses with a heavy reliance on physical documents that are difficult or expensive to replace (e.g., historical research, original client artwork on paper) might be stronger candidates for this endorsement. The underwriter will also confirm that the HO 07 01 is active on the policy.
• Pricing: This endorsement will typically carry an additional premium due to the broadened scope of coverage.
• Documentation: Ensure the type of home business and the nature of the valuable papers are well-documented in the underwriting file.