The Insurance Services Office (ISO) commercial property program provides separate forms for insuring condominium properties from those used for general property. A single form—CP 00 17—is used for condominium associations.  This form is used in conjunction with declaration forms, common policy and commercial property coverage conditions, causes of loss, and any of various other endorsements. Residential unit owners are, of course, insured under the homeowners form HO 00 06 10 00.

Analysis

The current version of the condominium association coverage form clarifies that coverage for the building is exclusive of items such as fixtures found in individual units (except for that required to be insured by the condominium association). Since the CP 00 10 is for a commercial establishment, it is unnecessary to restrict coverage to non-individual units, so “fixtures, including outdoor fixtures” are covered. Further, “appliances used for refrigerating…” are covered under the CP 00 10 without the condominium language that limits coverage to appliances not contained in individual units.  Another difference in the coverage provision is in item (6), which is not found in the CP 00 10. This item adds to the building definition fixtures, improvements, and alterations that are part of the building or structure, and appliances “such as those used for refrigerating, ventilating, cooking, dishwashing, laundering, security, or housekeeping,” when such property is contained within a unit, regardless of ownership, if the condominium association agreement requires the association to insure it. For example, lighting fixtures, built-in cabinets or bookshelves, or a dishwasher that the individual unit owner has installed will be covered by the association coverage form if the association agreement requires that the association insure such property. Note that this extension picks up in part items not included in building item (4)—but only property within a unit, not in the common area.

Analysis

In place of the seven-item definition of “your business personal property” of form CP 00 10, form CP 00 17 uses a shorter definition adapted for condominiums. However, it uses the term “your business personal property,” a misnomer for condominium property except in a commercial condominium or a new condominium still under control of the developer. A residential condominium controlled by the unit owners is in no sense a business and does not have “business property.” Older condominium forms simply refer to “personal property of the insured,” a more apt description. Nonetheless, this is not likely to cause problems. The remainder of the definition makes it reasonably clear what property this provision intends to cover—personal property in or on the building described in the declarations or in the open or in a vehicle within 100 feet of the premises, owned by the insured or indivisibly by all unit owners, but not personal property “owned only by a unit owner.” Included is the insured's interest in labor, materials, or services furnished or arranged on property of others. Leased personal property that the association has a contractual responsibility to insure is included in the definition. So, for example, if the association leases equipment for grounds maintenance, it will be covered.

The CP 00 17 contains the same coverage for property of others as the CP 00 10.

Analysis

The list of seventeen items of property not covered is identical under forms CP 00 10 and CP 00 17 with two minor exceptions. The exemption from the exclusion of animals owned as “stock” while inside of buildings, found in form CP 00 10, is not included in form CP 00 17. The condominium form also refers to property covered under “this or any other policy,” while the CP 00 10 refers to “property that is covered under another coverage form.” The change in wording appears to reflect the blending of commercial coverage with personal coverage found in the HO 00 06. In other words, the unit owner would be more likely to understand the HO 00 06 as a “policy of insurance” rather than a “coverage form.”

As does the CP 00 10, the CP 00 17 adds that “trailers” are not included as motor vehicles, “to the extent” that such trailers are covered by the new coverage extension.

The CP 00 17 provides the same additional coverages as the CP 00 10, including the newly added “increased cost of construction,” which provides coverage for extra costs to meet new construction codes. For more on this coverage see Building and Personal Property Coverage Form.

In the current form, certain of the coverage extensions have increased dollar amounts provided. Item c. valuable papers and records—cost of research, now allows for $2,500 at each described premises for the cost to research or restore lost information. For item d. property off premises, the insured may extend coverage up to $10,000 rather than the $5,000 allowed by the previous form.

As does the current version of the CP 00 10, the CP 00 17 now provides a coverage extension of up to $5,000 for nonowned detached trailers used by the insured in its business.

New to the current condominium association form is a treatment of application of the deductible. For a discussion, see Building and Personal Property Coverage Form.

Added to the loss payment provision of form CP 00 17 is the following clause not included in form CP 00 10: “If you name an insurance trustee, we will adjust losses with you, but we will pay the insurance trustee. If we pay the trustee, the payments will satisfy your claims against us.” This reflects the common practice among condominiums of naming a trustee to act on behalf of the unit owners in common on insurance and other financial matters. The remainder of the loss payment provisions are identical to those of form CP 00 10, including the addition of the referral to the “valuation” clause.

Analysis

This provision is unique to form CP 00 17. It provides that the insurance for the condominium association is primary and not contributory with any insurance on the same property carried by individual unit owners. This provision is complementary to the provision of unit owners form HO 00 06 and commercial unit owners form CP 00 18 that makes that insurance excess over any insurance on the same property provided for the condominium association.

The current form has revised the vacancy provisions so that “vacancy” is now defined. A building is now vacant if at least 31 percent of its square footage is not rented to others or used by the building owner. For a discussion, see Building and Personal Property Coverage Form. It is important to note that a building undergoing construction or renovation is not considered vacant.

Analysis

This provision is also unique to form CP 00 17. It waives the insurer's right of recovery against unit owners for damage to insured property for which the insurer has paid the association. It modifies the general subrogation provision—now called “transfer of rights of recovery against others to us”—found in the commercial property conditions, form CP 00 90, with respect to unit owners only.

The CP 00 17 offers the same optional coverages as the CP 00 10, including the newly added “extension of replacement cost to personal property of others.”

For more on this coverage see Building and Personal Property Coverage Form.

The commercial property form CP 00 10 contains definitions for “pollutants” and “stock.” In keeping with its usage for the condominium association, the CP 00 17 has omitted the definition of “stock.”

The definition of covered property in form CP 00 17 is very broad. In many cases the insurance requirements found in the condominium declaration or bylaws call for more limited coverage by the association, sometimes limiting the association's coverage to the original installation, or even to the “bare walls.” In such cases, it is necessary to modify the description of property covered by the policy to conform to this requirement. Under the old SMP program, a special endorsement for condominiums, form MP 04 61, was provided for this purpose. There is no similar form under the commercial property program. However, a general purpose endorsement, CP 14 20 11 91, additional property not covered, can be used, with manuscripted language to fit the particular condominium requirements.

In some states, the condominium law spells out the way the property will be insured—what property is to be covered by the association and what by the unit owners individually. For these states, ISO has provided modifying state endorsements adapting the property definition to the state requirements. Among the states where there are special endorsements for this purpose are Florida, Massachusetts, Minnesota, and West Virginia .