August 25, 2014

On the declarations page of a CP 0010 06 07, Building and Personal Property Coverage Form, business personal property is listed and insured for $100,000, and stock is also listed and insured for $50,000. Insured has a loss to stock only, and the loss to the stock is in excess of $50,000. Would the loss be limited to the $50,000 or could an argument be made that the stock is also included in the business personal property limit since it is listed as business personal property on the form?

Arizona Subscriber

The ISO rules state that stock can be covered as a separate item with an indication in the declarations or by using form CP 19 10, Your Business Personal Property – Separation of Coverage.

Form CP 19 10 states, “If a Limit of Insurance is shown for Your Business Personal Property in the Declarations, without further indication of the Type of Property, that Limit of Insurance will not apply to any property described in this endorsement.” If the stock is listed separately with a $50,000 limit in the declarations, it seems that the intention is to place a lower limit on stock than what is available for business personal property. The stock should be limited to $50,000.