Summary: AAIS has introduced a new businessowners program that takes the place of the earlier program. There are two forms, to which many endorsements may be attached to cover a variety of businesses. These are the BP 0100 (01 04 edition), which provides standard, or named perils, coverage, and the BP 0200 (01 04 edition), which provides open perils coverage. Both forms include liability coverages. The BP 0200 form provides some additional coverages not included in the BP 0100.

Following is a discussion of the BP 0200, with differences from the BP 0100 noted.

Topics covered:

Agreement; conditions

Definitions

Property covered

Property not covered

Additional coverages

Extensions of coverage

Loss of income

Perils covered

Exclusions

Loss conditions

Loss valuation and payment

General conditions

Optional coverages

Agreement; Conditions

The AAIS businessowners forms promise to provide the coverages described in the policies in exchange for the required premium. Certain terms and conditions apply. The current editions of the AAIS forms do not contain cancellation conditions. These are now in state-specific amendatory endorsements and no longer appear within the body of the forms.

The common policy conditions include:

1.Assignment; change of policy terms. The insured cannot assign the policy to another entity without the insurer's consent, nor can the insured change or waive any of the policy terms without the insurer's consent.

2.Examination and inspection. The insurer has the right to examine the insured's books relating to the policy during the policy period, and for three years thereafter. The insurer also has the right, but not the obligation, to inspect the insured property and operations. Inspection does not constitute a warranty that there are no defects or unsafe operations.

3.Liberalization; conformity with statute. If the insurer adopts a revision of forms during the policy period that broadens coverage but does not result in an increase in premium, the broadened coverage applies to the policy. Additionally, if the revision is adopted within sixty days before the policy's inception, the revision will apply. If the policy's terms conflict with the statutes of any states where the insured property is located, the policy's terms are amended to conform.

4.Cooperation; misrepresentation. In event of a loss, the insured must cooperate in performing all duties required by the policy. If the named insured, or any other insured, willfully conceals or misrepresents any material fact or circumstance, the coverage is voided.

Definitions

The definitions that follow apply to all the coverages contained in the policy. These definitions can effectively be broken into three groups. The first group contains usual definitions such as that for the named insured; the second group contains definitions pertaining to computers; and the third group contains the definitions that apply to fungi or to pollutants. The definitions that follow, therefore, are not in the order in which they appear in the forms.

1.The words “you” and “your” mean the person, persons, entity, or organization named as the insured on the “declarations”.

2.The words “we”, “us” and “our” mean the company providing this coverage.

3.”Basic territory” means the United States, America, its territories and possessions, Canada, and Puerto Rico.

6.”Declarations” means all pages labeled “declarations”, supplemental declarations, or schedules, which pertain to this policy.

9.”Limit” means the amount of coverage that applies.

15.”Terms” means provisions, limitations, exclusions, conditions, and definitions that apply.

Analysis

These are definitions that are typically found in policies of insurance. Often the definition for the coverage territory is found elsewhere in a policy, most often in a coverage grant. Here it appears within the definitions applicable to the entire policy.