We insure a large commercial operation. Our question deals with property coverage. There are two buildings connected by a walkway, and at one time both buildings were occupied. Some time ago the buildings were condemned and the newer building was rehabbed for continued occupancy. Fire doors were installed and locked to prevent entry into the condemned building. The condemned building housed a boiler and electrical panels that serviced the occupied building, and some property was in storage there.

The original bid specs stated that coverage should be provided on a blanket value basis with replacement cost on building and contents. Coverage should apply on an agreed value basis with the insured filing a statement of values as required. The specs stated that the one building was substantially vacant. The statement of values provided by the insured stated a replacement value for the occupied building and a $0 value for the condemned building

At renewal, the bid specs' request for coverage stated "…to provide all risk coverage for all of the property described on the statement of values. Coverage should be on a blanket basis with replacement cost coverage for building, personal property and property in the open to apply at all locations unless otherwise noted [nothing was noted]. Coverage is on an agreed value basis." The bid specs submitted and the statement of values still showed a replacement value for the occupied building and $0 value for the condemned building