MS PC 01 is an endorsement that modifies the CGL forms, the commercial property form, and the causes of loss—special form; the provisions of these forms apply to the risk except as otherwise provided in MS PC 01. The endorsement enhances the coverages provided by the standard property form by offering additional coverages and coverage extensions to the commercial property form. MS PC 01 amends the exclusions section of the causes of loss form. And, as for the CGL forms, MS PC 01 adds an insuring agreement pertaining to coverage for property damage claims directly arising from the named insured's work for a client; some definitions are also added.

The plumbing and HVAC program also offers mechanical breakdown coverage through the use of an endorsement, and provides a supplemental schedule to allow the insured to choose the coverage he needs and the limit of insurance he wants for his exposures.

MS PC 01 modifies the property not covered section of the commercial property coverage form in a couple of ways. MS PC 01 states that the following property is not covered except as provided in its additional coverages provisions: accounts, bills, currency, food stamps, or other evidences of debt, money, notes or securities. And, the following property is not covered property while outside of buildings except as provided in the additional coverages or coverage extensions sections of MS PC 01: grain, hay, straw, or other crops; fences; radio or TV antennas and their lead-in wiring, masts, or towers; signs; and trees, shrubs, or plants.

The commercial property form offers the insured up to $1,000 for liability for fire department service changes. MS PC 01 increases this amount to $5,000. None of the other provisions of the fire department service charge coverage are changed.

The commercial property form offers six additional coverages. MS PC 01 adds eight more coverages to this category.

Money and Securities. MS PC 01 will pay for loss to money and securities used in the named insured's business. The coverage is there while the money and securities are at a bank, within the named insured's living quarters, at the described premises, at a client's premises, or in transit between these places. The covered causes of loss are theft, disappearance, or destruction; excluded causes of loss are accounting or arithmetical errors, loss due to giving property in any exchange or purchase, and loss of property contained in any money-operated device. Unless different limits are shown in the declarations, the most paid under this additional coverage is $5,000 while the money and securities are in a bank or the described premises, and $2,500 for loss while the money and securities are anywhere else. All loss caused by one or more persons and involving a single act or series of related acts is considered one occurrence; this is important since the loss is covered on a per occurrence basis.

Fire Extinguisher Systems Expense. This endorsement will pay for the cost of recharging or replacing—whichever is less—the fire extinguishers and extinguishing systems if they are discharged on or within 100 feet of the described premises. Also covered is loss or damage to covered property as a result of an accidental discharge. The most that will be paid under this coverage is $5,000 in any one occurrence, with no deductible applying.

Reward Payment. The named insured will be reimbursed up to $5,000 for rewards paid to an eligible person for information leading to the arrest and conviction of any person committing a crime resulting in loss to covered property from a covered cause of loss. Up to $5,000 is also paid for a reward paid to an eligible person for the return of stolen covered property when the loss is caused by theft. An eligible person means that person designated by a law enforcement agency as being the first to voluntarily provide the information leading to the arrest and conviction or return of the stolen covered property. The following persons cannot be eligible persons: the named insured and family members; the named insured's employees and family members; an employee of a law enforcement agency; an employee of a business engaged in property protection; any person who had custody of the covered property at the time the theft was committed; or any person involved in the crime.

Money Orders and Counterfeit Paper Currency. The insurer will pay for loss resulting directly from the named insured's having accepted in good faith money orders not paid upon presentation, or counterfeit paper currency that is acquired during the regular course of business. The most that will be paid for any loss under this additional coverage is $1,500, unless a different limit is shown on the declarations.

Forgery or Alteration. The insurer promises to pay for loss resulting directly from forgery (a defined term) or alteration of checks, drafts, promissory notes, or similar written promises to pay a sum certain in money. The most to be paid is $5,000 in any one occurrence, unless a different limit is shown in the declarations. This amount includes legal expenses of the insured in case the insured is sued for refusing to pay the forged or altered instrument on the basis that it has been forged or altered.

Note that mechanically reproduced facsimile signatures are treated the same as handwritten signatures.

Outdoor Signs. The insurer promises to pay for direct physical loss of or damage to all outdoor signs at the described premises that is owned by the named insured, or owned by others but in the care, custody, or control of the named insured. The most to be paid in any one occurrence is $5,000. MS PC 01 does not cover damage to signs caused by wear and tear, hidden or latent defect, rust, corrosion, or mechanical breakdown.

Employee Dishonesty. MS PC 01 will pay for direct loss of or damage to the named insured's business personal property, money, and securities resulting from dishonest acts committed by any of the named insured's employees. The employees have to have the manifest intent to cause the named insured to sustain loss, and to obtain financial benefit. The loss suffered by the insured will be paid up to $5,000 in any one occurrence. All loss or damage caused by one or more employees and involving a single act or series of related acts is considered one occurrence.

There are several limitations to this coverage. MS PC 01 will not pay for loss or damage resulting from any dishonest or criminal act committed by the named insured, partners, members, officers, managers, directors, trustees, authorized representatives, or by anyone to whom the named insured entrusts the property that is taken or damaged. The endorsement will not pay for loss or damage, the proof of which as to its existence or amount, is based on an inventory computation or a profit and loss computation. The endorsement will not apply to loss or damage that the named insured sustains through acts not committed during the policy period, and the coverage will apply only for loss or damage discovered no later than one year from the end of the policy period. The limits of insurance for this type of coverage do not accumulate from policy period to policy period. And, this endorsement does not apply to loss caused by any employee after discovery by the named insured of any dishonest act committed by that employee before or after being hired by the named insured. So, if the named insured hires someone it knows has been convicted of theft or fraud, and that employee then proceeds to steal from the named insured after being hired, the loss is not covered by MS PC 01.

Artificially Generated Electrical Current. The endorsement will pay for loss or damage to computers due to artificially generated electrical current if such loss or damage is caused by or results from an occurrence that took place within 1,000 feet of the described premises.

MS PC 01 makes several changes to the coverage extensions section of CP 00 10 04 02.

Newly Acquired or Constructed Property. The first change is to the period of coverage for newly acquired or constructed property. MS PC 01 declares that coverage will end when any of the following first occurs: the policy expires; thirty days expire after the named insured acquires the property or begins construction; with respect to computers, when specific insurance at the newly acquired premises is obtained; or, when the named insured reports values to the insurer. The insured is charged additional premium for values reported from the date the named insured acquires the property or begins construction.

Personal Effects and Property of Others. The business personal property insurance is extended to personal effects owned by the named insured, officers, partners, managers, and employees; it is also extended to personal property of others in the care, custody, or control of the named insured. The most that the insurer will pay is $2,500 in any one occurrence; but, in no event will the insurer pay more than $500 for loss or damage to property of any one client (a defined term). This extension does not apply to loss or damage caused by theft, or to any loss or damage to employees' tools.

Valuable Papers and Records (Other Than Electronic Data). The business personal property insurance is extended to apply to direct physical loss or damage to valuable papers and records that the named insured owns, or that are in the care, custody, or control of the named insured. Coverage includes the cost to research lost information on valuable papers and records for which duplicates do not exist. The loss or damage must be caused by the specified causes of loss as defined in the causes of loss—special form, or by collapse. The most that the insurer will pay under this extension is $10,000 in any one occurrence at each described premises; for valuable papers and records not at a described premises, the most that will be paid is $5,000. The coverage does not extend to electronic data, property held as samples or for delivery after sale, or to property in storage away from the premises shown in the declarations.

Property Off-Premises. The named insured may extend coverage to covered property while it is away from the described premises under certain conditions. The property must be temporarily at a location that the named insured does not own, lease, or operate; the property must be in storage at a location leased by the named insured; or the property must be at a fair, trade show, or exhibition. This extension applies to computers for not more than ninety days while such property is in the course of transit, or is located at a premises the named insured does not own, lease, or operate. The extension does not apply to property in or on a vehicle (except for computers), or to property in the care, custody, or control of the named insured's salespersons (unless the property is at a fair, trade show, or exhibition). The most the insurer will pay for loss or damage is $10,000 in any one occurrence.

Outdoor Property. MS PC 01 will pay for loss or damage to fences and retaining walls that are not a part of a building; the most that will be paid in any one occurrence is $5,000. The endorsement will pay for loss or damage to outdoor radio, TV, satellite, or other antennas; the most to be paid for this extension is $5,000 in any one occurrence. Covered also are trees, shrubs, and plants other than stock; the most paid here is $5,000 in any one occurrence, but not more than $500 for any one tree, shrub, or plant. This coverage for outdoor property is only for the following covered causes of loss: fire, lightning, explosion, riot or civil commotion, or aircraft.

Employees' Tools. The named insured may extend the insurance that applies to the business personal property to apply to tools owned by the named insured's employees. This can be done while the tools are at the described premises, on a client's premises, or in transit with the employees; as to the last description, the “in transit” has to be directly between the described premises and a client's premises, and while in a motor vehicle owned, leased, or operated by the named insured. The most that will be paid for loss or damage under this extension is: $5,000 for any one occurrence at a described premises; $2,500 in any one occurrence while in transit; or $2,500 in any one occurrence at a client's premises. However, no more than $500 will be paid for any one tool or more than $1,000 for the tools of any one employee.

Only the following causes of loss are covered: fire, lightning, explosion, aircraft, vandalism and malicious mischief, or theft.

Accounts Receivable. MS PC 01 can cover accounts receivable. The endorsement will pay all amounts due from the named insured's customers that cannot be collected, interest charges on any loan required to offset amounts that cannot be collected, excess collection expenses, and other reasonable expenses incurred to reestablish accounts receivable records. The payment is made due to direct physical loss or damage by any covered cause of loss to the accounts receivable records. The most that will be paid under this extension in any one occurrence is $5,000. For accounts receivable not at each described premises, the most we will pay is $1,500 in any one occurrence.

Contractors' Installation Coverage. The insured can extend the insurance that applies to the named insured's business personal property to apply to loss of or damage to the following property: materials, supplies, equipment, machinery and fixtures owned by the named insured, or in the named insured's care, custody, or control and which are to be installed by the named insured; and temporary structures built or assembled by the named insured on site. The property is covered under the following circumstances: while at any job site that the named insured does not own, lease, or operate; while awaiting and during installation; in transit; or at a temporary storage location (a defined term). The most the insurer will pay for loss or damage is $10,000 per occurrence.

Coverage provided under this extension will end when one of the following first occurs: the policy expires or is cancelled; the property covered under this extension is accepted by the purchaser; the interest of the named insured in the covered property ceases; the named insured abandons the project with no intention to complete it; or ninety days after the project is completed. The extension does not apply to an existing building to which an addition, improvement or repair is being made. It does not apply to property stored at a permanent warehouse or storage yard that the named insured owns. It does not apply to a plan, blueprint, design, or specification. And it does not apply to machinery, tools, equipment, or similar property that will not become a permanent part of the project.

MS PC 01 will not pay for loss or damage caused by or resulting from any of the following: the cost to make good or replace faulty or defective materials or workmanship; testing; a fault, defect, deficiency, error, or omission in a plan, blueprint, design, or specification; or the weight of a load when it exceeds the designed capacity of any property covered under this extension.

MS PC 01 modifies the causes of loss—special form, CP 10 30 04 02.

The exclusions on CP 10 30 that deal with mechanical breakdown and losses due to dampness or changes in or extremes of temperature are replaced. MS PC 01 declares that the insurer will not pay for loss or damage caused by or resulting from mechanical breakdown,, including rupture or bursting caused by centrifugal force. There are two exceptions to this: the exclusion does not apply to a mechanical breakdown resulting in elevator collision, or to coverage for artificially generated electrical current. As for the extremes of temperature exclusion, MS PC 01 states that loss to personal property due to dampness or dryness of atmosphere, or changes in or extremes of temperature is not covered. The exception is if those conditions result from physical damage caused by a covered cause of loss to an air conditioning unit or system that is part of, or used with, computers.

MS PC 01 adds four exclusions that pertain only to the coverage for computers. These exclusions deal with loss by errors or omissions, electrical disturbance, computer-related losses, and computer advice or consultation.

Errors or Omissions. The endorsement does not apply to loss or damage caused by errors or omissions in processing, recording, or storing information on media or computers. 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 endorsement.

Electrical Disturbance. Loss due to electrical or magnetic injury, disturbance, or erasure of electronic recordings is not covered. Direct loss or damage caused by lightning is covered.

Computer-Related Losses. The inability to correctly recognize, process, distinguish, interpret, or accept one or more dates or times is another cause of loss that MS PC 01 does not cover. This relates to the failure, malfunction, or inadequacy of the following: computer hardware, software, operating systems, networks, microprocessors (computer chips) that are not part of any computer system, and any other computerized or electronic equipment or components.

Computer Advice or Consultation. MS PC 01 will not respond to a loss or damage caused by any advice, consultation, design, evaluation, inspection, maintenance, repair, replacement, or supervision provided or done by or for the named insured in order to rectify or test for any potential or actual problems described in the computer-related loss clause.

If an excluded cause of loss as described in these four clauses results in a specified cause of loss (a defined term on CP 10 30), or in elevator collision resulting from mechanical breakdown, the insurer will pay for the loss or damage caused by these things.

The section B exclusions on CP 10 30 operate to eliminate coverage as specified, regardless of any other cause or event that contributes concurrently or in any sequence to the loss. MS PC 01 declares that the section B exclusions do not apply to the following coverages that are on the endorsement: employee dishonesty, outdoor signs, and valuable papers and records.

The following additional exclusions apply only to the accounts receivable coverage extension offered by MS PC 01. The insurer will not pay for loss or damage caused by or resulting from alteration, falsification, concealment, or destruction of records of accounts receivable done to conceal the wrongful giving, taking, or withholding of money, securities, or other property. The exclusion applies only to the extent of the wrongful giving, taking, or withholding. The insurer also will not pay for loss or damage caused by or resulting from bookkeeping, accounting, or billing errors or omissions. And, the insurer will not pay for any loss or damage that requires any audit of records or any inventory computation to prove its factual existence.

The CGL form has three insuring agreements: coverage A, bodily injury and property damage liability; coverage B, personal and advertising injury liability; and coverage C, medical payments. MS PC 01 adds an insuring agreement covering the named insured's work.

MS PC 01 promises to reimburse the named insured for property damage claims directly arising from the named insured's work for a client. The insurance applies under five conditions: if the work was performed by the named insured or an employee; if the work was performed during the policy period; if the named insured reasonably determines that payment to the client is necessary; if the named insured received a notarized notification of a demand for remuneration from the client by mail within ninety days after the work was performed or completed; and if the work has been completed.

There are some exclusions to limit the scope of this insuring agreement. The insurance does not apply to the named insured's work performed at any location owned by, rented or leased to the insured. It does not apply to work performed by a subcontractor. And, it does not apply to property damage excluded under coverage A of the CGL form.

The most that will be paid for the sum of all damages covered under this insuring agreement is $5,000 in any one occurrence, and $10,000 in any annual period.

There are nine definitions listed on MS PC 01.

Client. A client is defined as an individual, company, or organization with whom the named insured has a written contract or work order for services. The services are for a described premises and the client has to have been billed for the services.

Computer. A computer is defined as the named insured's programmable electronic equipment that is used to store, retrieve, and process electronic data. A computer includes component parts and dedicated air conditioning, fire suppression equipment, and electrical equipment used exclusively in the named insured's computer operations. It also includes associated peripheral equipment that provides communication, including input and output functions such as printing or auxiliary functions such as electronic data transmissions. However, a computer does not include electronic data and media.

Counterfeit. This means an imitation of an actual valid original that is intended to deceive and to be taken as the original.

Employee. This term is defined with respect to coverage provided under the money and securities and employee dishonesty clauses of endorsement MS PC 01. An employee is any natural person while in the service of the named insured (or for thirty days after termination), who the named insured compensates directly by salary or wages or commission, and who the named insured has the right to direct and control while performing services for the named insured. An employee also includes any natural person (not a merely legal person such as a corporation) who is furnished temporarily to the named insured to substitute for a permanent employee who is on leave, or to meet seasonal or short term work load conditions; this is so while that person is subject to the direction and control of the named insured, and performing services for the named insured. An employee does not include any agent, broker, person leased to the named insured by a labor leasing firm, factor, commission merchant, consignee, independent contractor, or representative of the same general character. Any manager, director, or trustee is not an employee except while performing acts coming within the scope of the usual duties of an employee.

Forgery. Forgery is the signing of the name of another person or organization with intent to deceive. It does not mean a signature that consists in whole or in part of one's own name signed with or without authority, in any capacity, or for any purpose.

Manager. This term is defined with respect to employee dishonesty coverage only and it means a person serving in a directorial capacity for a limited liability company.

Money. Money is currency, coins, and bank notes in current use and having a face value, and travelers checks, register checks, and money orders held for sale to the public.

Securities. Securities are negotiable and nonnegotiable instruments or contracts representing either money or other property. The term includes tokens, tickets, revenue, and other stamps (whether represented by actual stamps or unused value in a meter) in current use, and evidences of debt issued in connection with credit or charge cards (not issued by the named insured). The term does not include money.

Temporary Storage Location. This is a location where property that is to become a permanent part of a completed project is stored while waiting to be delivered to the job site. The job site cannot be owned, leased, or operated by the named insured, and work on the job site has to have work in progress or work that will begin in thirty days.

There are two endorsements available for use with MS PC 01: MS PC 02 which pertains to mechanical breakdown coverage, and MS PC DS which is the supplemental schedule for MS PC 01.

The mechanical breakdown coverage endorsement modifies the building and personal property coverage form and the causes of loss—special form. MS PC 02 provides coverage for direct damage to covered property caused by an accident to an object. The object must be owned by the named insured or in his care, custody, or control, and at the described premises. Both the terms “object” and “accident” are defined on MS PC 02.

An accident means a sudden and accidental breakdown of the object or 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, wear and tear, leakage at any valve or joint, breakdown of any vacuum tube or any electronic computer or EDP equipment, the functioning of any safety or protective device, or the explosion of gases or fuel within the furnace or within the flues or passages through which the gases of combustion pass.

An object is a boiler and pressure vessel or an air conditioning and refrigerating unit and piping having a capacity of 60,000 Btu or more.

The insurer will not pay for an accident to any object while being tested, or for damage caused directly or indirectly by the failure or malfunction of any computer or its parts.

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 from an accident to that object. This can be done by delivering or mailing a written notice of suspension to the named insured's last known address, or to the address where the object is located.

MS PC 02 is akin to the boiler and machinery coverage form, BM 00 20 07 01; for information on this form, see Boiler and Machinery Coverage Form.

MS PC DS is a schedule used in conjunction with the commercial property coverage part and the CGL coverage part when they are used together to insured plumbing, heating, ventilation, and air conditioning contractors. The schedule allows the insured to choose which coverages are to be provided, the limits of insurance for those coverages, and the premium that the insurer charges for the chosen coverages.

The insured lists the premises where he wants the coverage to apply and then checks off the coverages he wants. The coverages available are: money and securities; money orders and counterfeit paper currency; forgery or alteration; outdoor signs; employee dishonesty; personal effects and property of others; valuable papers and records (other than electronic data); employees' tools; accounts receivable; and contractors' installation coverage. MS PC DS also allows the insured to check off an “other” category, but the insured must specify just what he means by this choice.

MS PC DS also has a place for the insured to show he wants mechanical breakdown coverage.