The Insurance Services Office (ISO) has developed a form MS LS 01 to be used for businesses engaged in various aspects of landscaping: landscape gardening, lawn care services, and the like. MS LS 01 is an endorsement that modifies the CGL forms, the commercial property form, and the causes of loss—special form.  The provisions of these underlying forms apply to the risk except as otherwise provided in MS LS 01. The endorsement enhances the coverages provided by the standard forms by offering additional property coverages, some crime coverages, and errors and omissions coverage. The limits of insurance offered by MS LS 01 are base limits that can be increased through the use of a supplemental schedule, MS LS DS.

The common policy conditions form IL 00 17 11 98 and the commercial property conditions form CP 00 90 07 88 must be attached to all policies.

The landscapers program is designed for businesses that provide landscape, lawn care and maintenance services, and installation of gardens, trees, shrubs, plants and lawns. Although tree pruning, dusting, fumigating, and repairing are permissible, the endorsement should not be used for businesses engaged in crop spraying, nor can it be used for engineers or architects not engaged in actual construction, fertilizer dealers or distributors, greenhouse building, nurseries, or excavation or land grading businesses.

The building and personal property coverage form considers the following as covered property: buildings, business personal property, and personal property of others in the care, custody, or control of the named insured. MS LS 01 adds that this coverage (1.c. Personal Property of Others) includes “property sold under an installment agreement but only for the period of time during which your insurable interest continues until the property is accepted by the purchaser for whom the project is to be performed.” It is a common practice to deliver (or at least have at the ready) all the trees, plants, shrubs, mulch, etc. at one time that are to be installed as part of a landscaping project. This provision helps avoid coverage disputes between the insured and the customer at the time of a loss.

The property not covered section is modified: accounts, bills, currency, food stamps or other evidences of debt, notes, “money” or “securities” (as defined; see Definitions below) are not covered except provided in the additional coverages. Grain, hay, straw or other crops are not covered while outside of buildings, nor are fences, antennas, masts or towers, signs not attached to a building, trees, shrubs, or plants (other than the insured's stock of trees, shrubs, or plants) except as provided in the coverage extensions or additional coverages. The exception to the exclusion for vehicles or self-propelled machines (including air- and watercraft) is modified so that self-propelled lawn care and landscaping machines operated primarily away from the insured premises are covered.

Attaching the MS LS 01 to the CP 00 10 increases the amount of the fire department service charge from $1,000 to $5,000. This is the only additional coverage that is modified; however, new coverages are added. Additional coverage 4.g. provides coverage for money and securities. Coverage limits (which may be increased) for any one occurrence are $2,500 for money and securities used in the insured business while on or off the described premises. Loss resulting from theft, disappearance, or destruction is covered. All loss caused by one or more persons and involving a single act or series of related acts is considered one occurrence. There is no requirement that the theft be carried out by an outsider, so that an employee's theft of money would be covered.

There is coverage (4.h.) for fire extinguisher systems expense. This is the expense to recharge or replace (whichever is less) fire extinguishers or systems that have been discharged on or within one hundred feet of the described premises, unless the discharge occurs during testing or installation. This coverage may also be used for loss or damage to covered property resulting from accidental discharge of chemicals from a fire extinguisher or system.

Additional coverage 4.i. is reward payment. This coverage provides up to $5,000 to an “eligible person” for information leading to the arrest and conviction of a person committing a crime resulting in loss to covered property, or to an “eligible person” for the return of stolen covered property. The amount paid is the lesser of: a) the actual cash value of the covered property at the time of the loss, but not more than the amount required to repair or replace it; or b) the amount determined by loss settlement conditions.

“Eligible persons” are those not employed in a law enforcement or security capacity, the named insured or a family member, an employee or a member or his or her family, any person having custody of the property at the time the theft was committed, or any person involved with the crime. In order to receive the reward, the eligible person must have been designated by a law enforcement agency as having provided the information leading to arrest or recovery of property.

Additional coverage 4.j. money orders and counterfeit paper currency is limited to $1,500 but this amount may be increased. The coverage responds to acceptance, in good faith, of “counterfeit” (see Definitions, below) paper currency or money orders that are not paid upon presentation. The insured must have accepted the money or money orders in exchange for merchandise, money (as when giving change), or services.

There is an additional coverage (4.k.) for forgery or alteration. This amount is limited to $2,500 unless it is increased. (ISO rules allow an increase to $5,000 or $10,000.) Covered is loss resulting directly from forgery or alteration of checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain (that is, a specified amount) in money. The coverage is designed to protect the insured against anyone forging or altering the insured's checks or drafts. For example, if a person to whom the insured's business check was to be paid changed the amount from $250 to $2500 this coverage would respond. Included within the limit is coverage for reasonable legal expenses arising from a suit against the insured for refusing to pay the forged or altered amount.

Outdoor signs are covered for direct physical loss or damage if the signs are owned by the insured or in the insured's care, custody, or control. For example, it is not uncommon for a landscaper to rent a portable sign to place at a project site to advertise. Coverage is on an open perils basis, except loss caused by wear and tear, hidden or latent defect, rust, corrosion, or mechanical breakdown is not covered. This additional coverage 4.l. is limited to $2,500, but may be increased.

Additional coverage 4.m. provides coverage for employee dishonesty. Direct loss of or damage to the insured's business personal property, money, or securities resulting from dishonest acts of employees (see Definitions, below), acting alone or in collusion with others is covered up to $2,500. The rules allow an increase to $5,000, $7,500 or $10,000 per occurrence.

As is the case with many crime forms, the dishonest acts must be carried out with the “manifest intent” to cause the insured to sustain loss, and to obtain financial benefit beyond a salary, commission, profit sharing or other regular benefit earned in the course of employment. The financial gain need not necessarily be for the benefit of the employee committing the act; the employee may be stealing for another person or organization.

Certain restrictions apply. There is no coverage for any loss resulting from a dishonest or criminal act committed by the named insured, his or her partners, members, officers, managers, directors, trustees, authorized representatives, or anyone to whom the named insured has entrusted the lost or damaged property. This language conceivably can lead to a situation whereby an employee steals a lawn tractor from the insured business premises and there is coverage, but if that same employee is entrusted to take the tractor to be serviced and steals it, no coverage applies.

There is no coverage if the only proof of the loss is an inventory or a profit and loss computation. All loss or damage caused by one or more employees and involving a single act or a series of related acts is considered to be one occurrence. The policy period is the defining time frame for loss or damage. In other words, the coverage is not cumulative, no matter how long the policy remains in force. And, if the named insured discovers that an employee has committed a dishonest act prior to or after being hired, any loss committed after that discovery will not be covered.

The period of discovery for employee dishonesty is one year from the end of the policy period. If the named insured discovers a loss or damage during the current policy period that was sustained during a period of prior insurance, and that could have been recovered except that the discovery period had expired, the MS LS 01 will pay the loss so long as certain conditions exist. These conditions are that the additional coverage on this policy became effective when the other insurance ended, and the loss or damage would have been covered on this policy had it been in effect when the loss or damage occurred. That is, a loss not covered by this policy—a theft committed by a partner, perhaps—will still not be covered.

Additional coverage n. artificially generated electrical current applies to computers damaged by artificially generated electrical current. The loss or damage must have been caused by or resulted from an occurrence within one thousand feet of the described premises (a vehicle striking a utility pole, for example), or by an interruption of electric power, power surge, blackout, or brownout if the cause of this occurrence takes place within one thousand feet of the described premises.

The landscapers form MS LS 01 makes changes to the coverage extensions of the commercial form CP 00 10.

The first of these (F.5.a.) is for newly acquired or constructed property. The coverage extension modifies the coverage period provision. Coverage will end when any of these first occurs: the policy expires; thirty days expire after the named insured acquires the property or begins construction of that part of the building that would qualify as covered property; with regard to computers, when specific insurance at the newly acquired premises is obtained; or, finally, when the named insured reports values to the insurer. The insurer has the right to charge premium for the values reported from the date the property is acquired or construction begins of the part of the building that would qualify as covered property.

The coverage extension for personal effects and property of others is amended. The amount of coverage in the CP 00 10 is $2,500. This amount is left unchanged. The extension for personal property of others in the named insured's care, custody, or control is deleted from the MS LS 01, so that coverage applies only to personal effects owned by the named insured, officers, partners or members, managers or employees. However, loss or damage by theft is excluded, as is any loss or damage to employees' tools.

Valuable papers and records (other than electronic data), coverage extension 5.c., allows the named insured to extend the coverage applicable to business personal property to apply to direct physical loss or damage to valuable papers and records that are owned by or in the care, custody, or control of, the named insured. Included is the cost to research lost information on the valuable papers for which duplicates do not exist. Not included within this extension is coverage for papers and records that exist as electronic data. Loss must be the result of a covered cause of loss, as bounded by the “specified causes of loss” as defined in the special form and collapse as set forth in that form.

The amount the insurer will pay is limited to $5,000 in any one occurrence at the described premises (this amount may be increased to $25,000), or $2,500 not at a described premises. This amount is additional insurance. Although the insurer will pay the cost of blank material for reproducing the records, and the cost of labor to transcribe the records, these costs are subject to the limit of insurance on business personal property. Therefore, these costs are not additional insurance.

The extension for property off-premises (5.d.) is modified to include coverage for computers, as well as other covered property, for not more than ninety days while the property is in the course of transit or located at a premises the named insured owns, leases, or operates. Otherwise, property temporarily at a location that is not owned, leased, or operated by the named insured, or in storage at a leased facility, or at any fair, trade show or exhibition is covered. This coverage is limited to $10,000 in any one occurrence.

However, the extension does not apply to property in or on a vehicle (except for computers), in the care, custody or control of salespersons unless the property is at a fair, trade show or exhibition, or to property covered under the contractors' installation coverage extension (see below).

The modifications to coverage extension 5.d. outdoor property reflect the fact that a landscaper's premises might include items to be insured that generally are not contemplated in the CP 00 10. For example, many landscaper's premises actually showcase the owner's work, and the insured business would suffer if much outdoor property was damaged.

Fences and retaining walls not part of a building are covered for up to $5,000 in any one occurrence. (The CP 00 10 covers fences for $1,000.) Outdoor radio, television, satellite or other antennas are covered up to $3,000 (increased from $1,000 in the CP 00 10) in any one occurrence. Trees, shrubs, and plants other than stock are covered up to $25,000 (increased from $1,000 in the CP 00 10), but no more than $500 for any one tree, shrub, or plant.

Loss or damage must have been caused by or result from these covered causes of loss: fire, lightning, explosion, riot or civil commotion, or aircraft.

Coverage extension 5.g. contractors' installation coverage does not appear in the CP 00 10. This extension is tailored to fit a landscaper's business. The coverage for business personal property may be extended to apply to loss of or damage to materials, supplies, equipment, machinery, and fixtures owned by or in the care, custody or control of the named insured, and which are to be installed by or at the direction of the named insured. The extension also applies to temporary structures built or assembled by the named insured on site, including cribbing, scaffolding and construction forms.

The most the insurer will pay is $10,000 for any one occurrence. Property is covered while at any job site not owned, leased or operated by the named insured, while awaiting and during installation or awaiting acceptance by the purchaser, in transit, or at a “temporary storage location” (see Definitions, below).

The coverage ends when one of these first occurs: the policy expires or is cancelled; the covered property is accepted by the purchaser; the named insured's interest in the property ceases; the project is abandoned with no intent to complete the project; or ninety days after the project is completed, unless the insurer specifies a different date in writing.

The coverage extension does not apply: to existing buildings or structures to which an addition, improvement, alteration, or repair is being made; to property stored at a permanent warehouse or a storage yard owned by the named insured; to plans, blueprints, designs or specifications; or to machinery, tools, equipment, supplies or similar property that do not become a permanent part of the project. For example, the insured may haul lumber and decorative metalwork to construct a gazebo for the customer. But if the customer decides against the gazebo and it is not constructed after all, the lumber and metalwork will not be covered if the insured simply leaves it at the job site.

Loss or damage caused by or resulting from the cost to make good or replace faulty or defective materials or workmanship is not covered, nor is loss or damage because of faulty or deficient blueprints, designs, or specifications. Loss or damage resulting from testing (which is not further described) is not covered, but if the testing results in fire or explosion loss caused by the fire or explosion is covered. There is no coverage if the weight of a load exceeds the designed capacity of property covered under this extension to lift, move, or support the load. For example, the insured could use a hoist to move landscaping lumber into position. Thinking to save time, he loads lumber weighing a thousand pounds onto the hoist, which has a maximum load capacity of six hundred pounds. If the hoist breaks, there is no coverage for that equipment, nor is there any coverage for any property the falling lumber might damage.

Coverage extension 5.h. is for employees' tools. The insurance applying to business personal property may be extended to cover tools owned by employees. The limit for this coverage is $2,500 ($250 for any one employee) for any one occurrence at each described premises or at any job site the named insured does not own, lease, or operate. However, there is no coverage if the tools are left in an unattended vehicle unless there are visible signs of forced entry. This exclusion does not apply to property in the custody of a carrier for hire.

The final coverage extension is 5.i. accounts receivable. The amount the insurer will pay for any one occurrence is limited to $5,000 (which may be increased to $250,000) at each described premises and $2,500 not at the described premises.

Added in section F. Additional Conditions of the CP 00 10 is condition 3. facsimile signatures. This condition states that mechanically reproduced facsimile signatures will be treated the same as handwritten signatures.

The MS LS 01 adds, deletes, or changes many of the exclusions and limitations of the CP 10 30 causes of loss—special form.

The first modification is to the exclusion for mechanical breakdown, including rupture or bursting caused by centrifugal force. MS LS 01 states that the exclusion does not apply to the coverage for artificially generated electrical current (additional coverage 5.n.).

Exclusion B.2.d.(7)(a) and (7)(b) of the CP 10 30, for loss to personal property caused by dampness or dryness of atmosphere or changes in or extremes of temperature, becomes exclusion B.2.d.(7)(a) in MS LS 01. There is coverage if these conditions result from physical damage caused by a covered cause of loss to an air conditioning unit or system, including equipment and parts, which is part of or used with computers. Exclusion A.2.d.(7)(b) is marring or scratching. (It is exclusion B.2.d.(7)(c) in the CP 10 30.) If an excluded cause of loss in B.2.d.(1), (2), (6) or (7) resulted in a “specified cause of loss” or building glass breakage, the insurer will pay for the loss or damage caused by the specified cause of loss or the building glass breakage.

Form MS LS 01 adds four exclusions that pertain only to coverage for computers. The first of these is B.1.i., errors or omissions. Loss or damage caused by errors or omissions in processing, recording or storing electronic data on computers is excluded; however, the insurer will pay for direct loss or damage caused by resulting fire or explosion if these causes of loss would be covered by the MS LS 01.

Exclusion B.1.j. is for electrical disturbance which causes injury, disturbance, or erasure of electronic recordings. The exception is that direct loss or damage caused by lightning is covered.

Computer-related losses, exclusion B.1.k., declares that there is no coverage for loss—failure, malfunction, or inadequacy—arising from computer inability to recognize, accept, or distinguish one or more dates or times. This applies to: hardware, software, operating systems, networks, microprocessors, or any other computerized or electronic equipment or components, whether owned by any insured or another. Further, there is no coverage for failure or inadequacy or any other products, services, data or functions that use any of the listed items.

Finally, exclusion B.1.l. states that any computer advice or consultation provided by or done by or for the named insured to rectify or test for any problems described in exclusion B.1.k. is not covered.

If an excluded cause of loss as described in exclusions B.1.j., k., or l. (above) results in a “specified caused of loss” (as defined on the CP 10 30) or an elevator collision resulting from mechanical breakdown, the insurer will pay for the loss or damage caused by these. This does not include payment for repair, replacement or modification of any items in exclusion B.1.k. to correct any deficiencies.

The section B. exclusions of CP 10 30 do not apply to coverage for employee dishonesty. The section B. exclusions, except for governmental action, nuclear hazard, war and military action, or wear and tear, rust or corrosion, or mechanical breakdown do not apply to the coverage for outdoor signs. Coverage for valuable papers and records and accounts receivable also falls outside the section B. exclusions, except for governmental action, nuclear hazard, war and military action, computer-related losses, computer advice, continuous seepage, water resulting from freezing, and the section B.3. exclusions. Form MS LS 01 contains an additional exclusion applicable to the accounts receivable coverage extension. Loss or damage resulting from bookkeeping, accounting or billing errors or omissions is not covered. Loss or damage caused by or resulting from alteration or falsification or destruction of documents or records in order to conceal wrongful giving, taking or withholding of money, securities, or other property, but only to the extent of the wrongful giving, taking or withholding.

To the three insuring agreements of the CGL form—coverage A, bodily injury and property damage liability, coverage B, personal and advertising injury liability, and coverage C, medical payments—is added a fourth coverage D, landscape design errors and omissions.

The insurer promises to pay those sums the insured becomes legally obligated to pay as damages because of a landscape design error or omission. Included within the insuring agreement is the insurer's right and duty to defend against any suit, unless the damages are for errors or omissions to which the insurance does not apply. The limit for this coverage is $10,000 in any annual period starting with the beginning of the policy period; a $250 deductible applies. The limit applies separately to each premises described in the declarations.

The coverage applies only to errors in providing landscape design services that take place or omissions of services that should have taken place in the coverage territory and during the policy period.

Several exclusions apply, among them intentional error, dishonest or criminal conduct committed by the named insured or at the named insured's direction, the cost to repair or replace any construction or installation because of faulty workmanship, bodily injury, property damage, or personal and advertising injury (these have their separate insuring agreements; this exclusion merely reinforces the fact there is no additional coverage under this section), or contractual liability, unless the insured would have been liable in the absence of any contract or agreement. There is no coverage for any professional services if the named insured is insured under any professional liability policy.

Form MS LS 01 contains conditions governing duties in event of a claim or loss that refer specifically to coverage D landscape design errors and omissions. They are similar to the CGL form's duties in event of a claim or loss except the wording is modified to reflect an error or omission rather than bodily injury, property damage, or personal or advertising injury.

There are eight definitions listed on form MS LS 01. Remember, these are in addition to those contained on forms CP 00 10 and CP 10 30; they do not replace them.

The first is computer. A computer is the named insured's “programmable electronic equipment used to store, retrieve and process electronic data. It includes component parts and dedicated air conditioning, fire suppression equipment and electrical equipment used exclusively in [the named insured's] 'computer' operations; and associated peripheral equipment that provides communication, including input and output functions such as printing or auxiliary functions such as electronic data transmission.” Electronic data and media are not included in this definition.

Counterfeit means any imitation of a valid and actual original that is intended to deceive or be mistaken for the original.

The definition of employee is changed with regard to coverage provided under the additional coverages for money and securities and employee dishonesty. An employee is any natural person while in the service of the named insured (and for thirty days after termination of service), who is compensated through salary, wages, or commission, and directed and controlled by the named insured in the course of work. The definition includes any natural person furnished temporarily to the named insured to substitute for a permanent employee or to meet seasonal or short term work load demands, so long as the person is subject to the named insured's direction.

Excluded from this definition are agents, brokers, leased employees, or managers, directors or trustees except while performing acts within the usual scope of an employee's duties.

Forgery means signing the name of another person or organization with intent to deceive. It does not mean signing one's own name whether in whole or in part, with or without authority, for any purpose.

A manager is a person serving in a directorial capacity for a limited liability company. This definition applies only to coverage for employee dishonesty.

Money means currency, coins and bank notes in current use and having a face value. The definition includes travelers checks, register checks and money orders held for sale to the public. Securities means negotiable and nonnegotiable instruments or contracts representing money or other property. Included as well are redeemed coupons, tokens, tickets, revenue and other stamps (either actual stamps or unused value in a postage meter) in current use. Evidences of debt issued in connection with credit cards are securities, so long as the named insured has not issued the cards. Securities does not include money.

A temporary storage location is a location used to store property that is intended to become a permanent part of a completed project until it is delivered to that job site. The job site cannot be owned, leased or operated by the named insured, and there must be work in progress, or where work will begin in thirty days, at the site.

One endorsement to the MS LS 01 is currently available, and that is for mechanical breakdown (MS LS 02). The endorsement may be used instead of a boiler and machinery coverage form. (For information on ISO's boiler and machinery coverage form, BM 00 20 07 01, see Boiler and Machinery Coverage Form.) The endorsement deletes the exclusions on the causes of loss—special form for mechanical breakdown, including rupture or bursting causes by centrifugal force, and for explosions of steam boilers, pipes, engines, or turbines. These are exclusions B.2.d.(6) and B.2.e.

Coverage under MS LS 02 is for direct damage to covered property caused by an accident to an object (a defined term; see below). The object must be owned by the named insured, or in the care, custody, or control of the named insured, and it must be at the described premises.

An accident means a sudden and accidental breakdown of the object or a part of the object. At the time the breakdown occurs, it must manifest itself by physical damage to the object that necessitates repair or replacement. None of the following is considered to be an accident: depletion, deterioration, corrosion, or erosion; wear and tear; leakage at any valve, fitting, shaft seal, joint, or connection; breakdown of any vacuum tube, gas tube or brush; breakdown of any electronic computer or electronic data processing equipment; breakdown of any structure or foundation supporting the object; the functioning of any safety or protective device; or the explosion of gases or fuel within the furnace of any object, or within the flues or passages through which the gases from combustion pass.

An object means any of the following boilers and pressure vessels: steam heating boilers and expansion tanks used with them; hot water supply boilers; fired or unfired vessels used for maintenance or service of the described premises (but not if they are used for processing or manufacturing). An object also means: steam boiler piping, valves, fittings, traps and separators, but only if they meet certain conditions. That is, the items must be on the named insured's premises or between parts of the premises; contain steam or condensate of steam; and not be a part of any other vessel or apparatus. Feed water piping between steam boilers and feed pumps or injectors are also objects.

However, boilers and pressure vessels are not objects if they are: equipment not under internal vacuum or internal pressure other than weight of contents; boiler settings; insulating or refractory material; electrical, reciprocating or rotating apparatus within or forming a part of the boiler or vessel; or buried vessel or piping.

Included as objects are air conditioning and refrigerating units and piping with a sixty thousand Btu capacity or more, along with: interconnected vessels, radiators, inductors, convectors and coils that make use of a refrigerant, steam, water, brine or other solution and form part of the unit; interconnecting metal piping, valves and fittings, containing only a refrigerant, water, brine or other solution; vessels heated directly or indirectly that form part of an absorption type system and function as a generator, regenerator or concentrator; compressors, pumps, fans and blowers used solely with the unit together with their driving electric motors; and control equipment used solely with the unit.

Air conditioning and refrigerating units are not objects if they are boilers, steam piping, vessels, cooling towers, reservoirs or other sources of cooling water for a condenser or compressor, or any water piping leading to or from that source; wiring or piping leading to or from the unit; any hose, flexible device or nonmetallic pipe connected to an electronic computer or electronic data processing equipment; or buried vessel or piping.

There are some exclusions that apply to this coverage. MS LS 02 will not pay for an accident to any object while being tested. MS LS 02 will not pay for damage caused directly or indirectly by the failure, malfunction, or inadequacy of any computer hardware and its application or operating software, networks, and systems due to the inability to correctly recognize, process, or accept one or more dates or times. There is no coverage for any advice, inspection, repair, replacement or supervision provided or done by the named insured to correct any of the above described problems. But if damage excluded results in an accident to an object, that damage is covered. The endorsement will not pay for repair, replacement, or modification of any computer or its parts or systems to correct any deficiencies or change any features.

Whenever an object is found to be in, or exposed to, a dangerous condition, any of the insurer's representatives may immediately suspend the insurance against loss offered by this endorsement.