ISO Market Segments Program

Summary: The Insurance Services Office (ISO) has developed a market segments program that provides coverages for certain specialty insurance markets. The program offers wrap-around endorsements that are used to enhance the coverages provided by standard coverage forms, notably the commercial property and general liability forms.

Form MS SF 01 07 13 is used to insure self-storage facilities. It modifies coverage under the commercial general liability form (CGL), the building and personal property coverage form (CP 00 10 10 12), and the causes of loss special form (CP 10 30 10 12). Form MS SF 01 contains broadened coverages as well as additional coverages not found in the basic forms. Mechanical breakdown (boiler and machinery) coverage, loss or damage to customers' autos, and hired auto and nonowned auto liability coverage may be added by endorsement.

This discussion gives highlights of the self-storage facilities coverage form.

Topics covered: Introduction Eligibility Changes to the building and property form—additional coverages Additional coverages Coverage extensions Changes to the causes of loss form Changes to the CGL form Definitions Endorsements to the MS SF 01 Self-storage facilities supplemental schedule

Introduction

MS SF 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 SF 01. The endorsement enhances the coverages provided by the standard forms by offering additional property coverages, some crime coverages, and coverages that apply only to a self-storage operation. The limits of insurance offered by MS SF 01 are base limits that can be increased through the use of a supplemental schedule, MS SF DS (discussed later). Coverage for hired and nonowned auto liability, mechanical breakdown (boiler and machinery), and loss or damage to customers' autos may be added by endorsement.

Common policy conditions form IL 00 17 11 98 and commercial property conditions CP 00 90 02 00 must be attached to forms CP 00 10, CP 10 30, and MS SF 01.

For additional information on the policies that are modified by this endorsement, see CGL Coverage Form—Coverage A; see CGL Coverage Form—Coverage B; see Medical Payments; see General Provisions of the CGL; see Building and Personal Property Coverage Form; and see Causes of Loss.

Eligibility

Form MS SF 01 may be used to insure those facilities where customers rent private space for storing their own property, and use their own locks or keys. These are also sometimes called mini-warehouses. (This is classification 18991 in the commercial lines classification table and is the only eligible classification.) The business may also engage in other operations requiring an additional classification.

Changes to the Building and Personal Property Form—Additional Coverages

Form MS SF 01, unlike the CP 00 10, pays for loss of money and securities. The coverage is limited to money and securities used in the insured's business while it is at a bank or savings institution, within the insured's living quarters or the living quarters of the insured's partners or employees having use and custody of the property. Money and securities in transit between any of these places are also covered. Money and securities are covered only for loss due to theft, disappearance, or destruction. Loss resulting from accounting or arithmetical errors or omissions, given in exchange or purchase, or of property contained in a money-operated device—unless the device contains a continuous reading instrument and records the deposit—is not covered. Up to $5,000 is available for money and securities while in or on the described premises or within a bank or savings institution, but other amounts may be scheduled. For money and securities while anywhere else, the limit is $2,500.

There is $5,000 coverage for fire extinguisher systems expense the cost of recharging or replacing, whichever is less, fire extinguishers or systems that have been discharged on or within one hundred feet of the described premises or building, 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. 

The reward payment 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 or stolen property of the insured's customers while the property is at the insured storage facility. 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. The eligible person is the friend at a bar where the thief is bragging and the person turns him in.

Loss or damage to money, securities, or other property directly resulting from the use of a computer to fraudulently make a transfer from inside the insured premises or from any bank or safe depository to a person outside those premises or to a place outside those premises is covered. The limit for this additional coverage is $25,000, but a different limit may be chosen. Coverage territory for this additional coverage is worldwide. Loss or damage must commence during the policy period.

The additional coverage for money orders and counterfeit money is limited to $1,500, but this amount may be increased. The coverage responds to acceptance, in good faith, of counterfeit money 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. While large bills are often checked to ensure that they are legitimate, lower denominations are not usually checked and they could easily be counterfeit.

An additional coverage for forgery or alteration contains a limit of $2,500 unless it is increased. (ISO rules allow an increase to $5,000 or $10,000.) 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 is covered. 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. Under this coverage, a mechanically reproduced check is treated the same as a handwritten signature. Checks include substitute checks, as defined in the Check Clearing for 21st Century Act.

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 business to rent a portable sign. Coverage is on a special causes of loss basis. This additional coverage is limited to $5,000 but may be increased. The endorsement's provision for outdoor signs supersedes all other outdoor signs coverage references in the Building and Personal Property Coverage form.

Coverage for employee dishonesty is provided by the endorsement. Direct loss of or damage to the insured's business personal property, money, or securities, and personal property of the insured's “customers” resulting from dishonest acts of employees, acting alone or in collusion with others is covered up to $25,000. The rules allow an increase to $50,000, $75,000 or $100,000 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 does not accumulate from one policy period to the next, 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 SF 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 the policy—a theft committed by a partner, perhaps—will still not be covered during the one-year period. Coverage for this period is included within the $25,000 (or greater) limit; it is not an additional amount of insurance.

Another additional coverage is for ordinance or law—equipment. If covered equipment suffers a covered cause of loss, the form pays the cost to repair or replace the equipment as required by law or ordinance. The reference to ordinance is new in the 2013 form. For covered refrigerated equipment, the insurer pays the cost to recover refrigerant as required by law, the cost to retrofit the equipment for non-CFC refrigerant as required by the Clean Air Act, and the increased cost to recharge the system with non-CFC refrigerant.

The coverage terms apply separately to each piece of covered equipment. The provision does not pay for costs associated with enforcement of laws or ordinances requiring testing for, monitoring, cleaning up, removing, containing, detoxifying, neutralizing, or responding in any way to or assessing the effects of pollutants.

If replacement cost coverage applies and the equipment is repaired or replaced on the same or another premises, loss to equipment will be determined as the lesser of the amount actually spent to repair or replace the equipment or the limit of insurance. If replacement cost coverage applies and the property is not repaired or replaced, or if replacement cost does not apply, the insurer owes the lesser of the actual cash value of the equipment at the time of loss or the limit of insurance.

The additional coverage for 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.

Coverage Extensions

Form MS SF 01 modifies many of the coverage extensions of the CP 00 10. The first of these is for newly acquired or constructed property. The coverage extension modifies the coverage period provision for newly acquired or constructed property. Coverage ends when any of the following 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, 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 increases the amount of coverage from $2,500 on the CP 00 10 to $5,000, which may be increased up to $10,000. The coverage applies to personal property of others in the named insured's care, custody, or control, and to personal effects owned by the named insured, officers, partners or members, managers, or employees. As is common with many of the coverages, this extension does not provide coverage for customers' property. Payment is only for the account of the owner of the lost or damaged property.

The coverage extension for valuable papers and records (other than electronic data) 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. This is different from the CP 00 10, which simply covers the cost to replace or restore lost information. 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 or coverage for valuable papers stored at the facility by customers. Loss must be the result of one of the specified causes of loss or collapse as set forth in the CP 10 30.

The amount the insurer will pay is limited to $10,000 in any one occurrence at the described premises (this amount may be increased to $250,000), or $5,000 for a loss not at the 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 includes coverage for computers while they are in the course of transit. Other covered property, while temporarily located at a premises the named insured does not own, lease, or operate, 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, but the amount can be increased.

The extension does not apply to property in or on a vehicle (except for computers) or in the care, custody or control of salespersons unless the property is at a fair, trade show or exhibition.

The modifications to coverage extension for outdoor property reflect the fact that a storage facility premises might include items to be insured that generally are not contemplated in the CP 00 10. For example, many self-storage premises are surrounded by security fencing. Thus, fences and retaining walls not part of a building are covered for up to $25,000 in any one occurrence. Outdoor radio, television, satellite, or other antennas are covered up to $3,000 in any one occurrence. Trees, shrubs, and plants other than stock or a vegetated roof are covered up to $5,000, but for no more than $500 for any one tree, shrub, or plant. Vegetated roofs are becoming more popular and conserve water; this has been added in the 2013 form. Roadways or walks are covered up to $5,000.

Loss or damage must have been caused by or result from fire, lightning, explosion, riot or civil commotion, or aircraft. Newly included in this expense is the cost to remove the debris trees, shrubs and plants that are the property of others, unless the insured is a tenant and such property belongs to the landlord.

The final coverage extension is accounts receivable. The amount the insurer will pay for any one occurrence is limited to $5,000 at each described premises and $1,500 for accounts receivable not at the described premises.

Changes to the Causes of Loss Form

The MS SF 01 adds, deletes, or changes many of the exclusions and limitations of the CP 10 30 causes of loss—special form. Because the MS SF 01 provides coverage for employee dishonesty, outdoor signs, valuable papers and records, and accounts receivable, many of the changes impact those coverages.

A new modification has been added and that is to the ordinance or law exclusion. That exclusion does not apply to the ordinance or law equipment coverage in section I of this form.

The next modification is to the mechanical breakdown exclusion. MS SF 01 states that the exclusion does not apply to loss or damage to computers.

The MS SF 01 replaces the CP 00 10's excluded causes of loss to personal property with an exclusion for loss or damage to personal property caused by dampness or dryness or atmosphere or changes or extremes in temperature unless the conditions result from physical damage caused by a covered cause of loss. Marring and scratching are also excluded. If excluded causes of loss result in a specified cause of loss or building glass breakage, the form pays for the specified cause of loss or building glass breakage.

Form MS SF 01 adds four exclusions that pertain only to coverage for computers. The exclusions contain the concurrent causation lead-in language. The first of these exclusions is 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 form MS SF 01.

The next exclusion is for electrical disturbance that causes magnetic injury, disturbance, or erasure of electronic recordings. The exception is that direct loss or damage caused by lightning is covered.

The computer-related losses exclusion 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. The exclusion applies to hardware, software, operating systems, networks, microprocessors, or any other computerized or electronic equipment or components, whether owned by any insured or another person or organization. Further, there is no coverage for failure or inadequacy or any other products, services, data, or functions that use any of the listed items.

The final exclusion 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 the computer-related losses exclusion is not covered.

However, if an excluded cause of loss as described in the electrical disturbance, computer-related losses, or computer advice or consultation exclusions results in a specified caused of loss (as defined in 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 the electrical disturbance exclusion to correct any deficiencies.

The exclusions section does not apply to the employee dishonesty additional coverage except governmental action, nuclear hazard, and war and military action. The exclusions section and limitations exclusion do not apply to the outdoor signs additional coverage except governmental action, nuclear hazard, war and military action, wear and tear, rust or corrosion, or mechanical breakdown. The exclusions section does not apply to the valuable papers and records (other than electronic data) and accounts receivable coverage extensions, except for governmental action, nuclear hazard, war and military action, computer-related losses, computer advice or consultation, continuous seepage or the presence of moisture over fourteen days or more, or water resulting from freezing. For valuable papers and records (other than electronic data) and accounts receivable coverage extensions, the following exclusions apply, but if an excluded cause of loss results in a covered cause of loss, the resulting loss or damage will be covered: weather conditions, but only if they contribute in any way with a cause or event excluded in ordinance or law, earth movement, governmental action, nuclear hazard, utility services, war and military action, water, and fungus; acts or decisions; and the faulty maintenance, planning, design, and materials exclusion.

Form MS SF 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 is not covered, but only to the extent of the wrongful giving, taking or withholding. Finally, any loss or damage that requires an audit of records or an inventory computation to prove its existence is not covered.

Changes to the CGL Form

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: customers' property legal liability coverage.

The insurer promises to pay sums the insured is legally obligated to pay as damages because of property damage to a customer's property, or the property of others for which the customer is liable. Note that the insured must be legally liable for the damages. This is not a “good will” coverage that reimburses customers for losses for which the insured cannot be held responsible. The coverage applies only while the property is at the insured's self-storage facility. The insurer has the right and duty to defend; however, the insurer has no duty to defend against a suit seeking damages to which the insurance does not apply. The limit is $100,000, which can be increased according to company rules and rates and applies separately to each premises shown in the declarations. A $250 deductible applies.

Form MS SF 01 adds exclusions to the CGL form that apply to the coverage for customers' property legal liability. First, there is no coverage for property damage to any land motor vehicle, trailer, or semi-trailer that a customer has stored at the insured premises. (But see the coverage for loss or damage to customers' autos under Endorsements to the MS SF 01 following.) Second, there is no contractual liability coverage, but this exclusion does not apply to damages the insured would have had in the absence of any contract or agreement. Third, intentional property damage or dishonest or criminal acts committed by the insured, the insured's employees, or anyone to whom the insured has entrusted the property are not covered. Note that the form now specifies that the exclusion applies regardless of whether or not the action applies during normal business hours. It also does not apply to act of destruction by employees or authorized representatives; so an employee can destroy the computer and it is covered, but if they steal it, it is not covered. There is also no coverage for liability arising out of the insured's “sale and disposal operations.” (This is a separate coverage; see following under Endorsements to the MS SF 01.) Loss or damage covered under the commercial property coverage part is also excluded.

The form also adds duties in the event of occurrence, offense, claim, or suit in regards to customers' property legal liability coverage. If a claim is made or suit brought due to the lockout or sale of customers' property, the insured must immediately record the date received and the specifics of the suit or claim. The insured must notify the carrier and make sure it receives written notice of the suit or claim as soon as practicable. The insured and any other insured who is involved must send the carrier copies of demands, summonses, notices, or legal papers received in connection with the claim or suit; authorize the carrier to obtain records; cooperate with the carrier's investigation; and—at the carrier's request—assist in the enforcement of any right against an organization or person that may be liable to the insured due to an action for which the insurance applies. The insured needs the carrier's consent to assume any obligation, make any payment, or incur any expenses.

Sale and disposal liability coverage provides liability for an act or omission arising from the lock-out or the sale or disposal of a customer's property. A sale and disposal occurs when the insured sells a customer's property to recoup unpaid storage fees; when the storage facility owner is entitled to do this depends upon the law in a given jurisdiction. The insurer has the right and duty to defend against a suit seeking damages. The right and duty to defend ends when the applicable limit of insurance has been used up in the payment of judgments or settlements. The limit of insurance is $25,000, which may be increased.

There are two exclusions to this coverage: (1) damages the insured is obligated to pay because of assumption of liability in a contract are not covered; this does not apply to liability the insured would have had in the absence of a contract; and (2) liability arising out of dishonest or criminal acts of the insured or an employee or any other person entrusted with the property is not covered.

Definitions

The definitions on the MS SF 010508 are in addition to those contained on forms CP 00 10, CP 10 30, and the CGL form; 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 money means “an imitation of money that is intended to deceive to be taken as genuine.”

A customer is “any person or organization which is renting, leasing or otherwise occupying space at [the named insured's] self-storage facility.”

An employee—in regards to money and securities and employee dishonesty coverages—means a natural person while in the insured's service and for the first thirty days immediately after termination of service (unless termination is due to theft or other dishonest act committed by the employee), who the insured compensates directly by salary, wages, or commission and who the insured has the right to direct while performing services. Natural persons temporarily furnished to the named insured to substitute for permanent employees or to meet short-term or seasonal needs are also included in the definition while they are subject to the insured's direction and control and performing services for the insured. Leased employees, former employees retained as consultants to the insured's company, and interns or guest students are considered employees under this definition as well. Employee of entities with which the insured merged or consolidated prior to the policy's effective date fall under the definition, too. Manager, directors, and trustees while performing acts within the scope of their usual employee duties or acting as a committee member elected or appointed to perform directorial duties on the insured's behalf are part of the definition of employee.

Regarding money and securities and employee dishonesty coverage, an employee is not any agent, broker, factor, commission merchant, independent contractor, consignee, or other type of representative (unless such representative fits the definition of employee).

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 lock-out means that a “customer” is denied access to either his own property or to the space he is renting, leasing, or otherwise occupying. This generally happens when the insured has not paid his bill for storage.

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

A member—in regards to employee dishonestly coverage only—is the owner of a limited liability company who may also be a “manager.”

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.

Occurrence—in regards to money and securities coverage only—is an individual act, the combined total of all separate acts whether or not related, or a series of acts whether or not related committed by a person acting alone or in collusion with others or not committed by any person that takes place during the policy period, before the policy period, or both. For computer fraud, customers' property, and money orders and counterfeit money coverages, an occurrence is an individual act or event, the combined total of all separate acts or events whether or not related, or a series of acts or events whether or not related committed by a person acting alone or in collusion with others or not committed by any person that takes place during the policy period, before the policy period, or both. For forgery coverage, an occurrence is an individual act, the combined total of all separate acts whether or not related, or a series of acts whether or not related committed by a person acting alone or in collusion with others, involving one or more instruments, during the policy period, before the policy period, or both. For employee dishonesty coverage, an occurrence is an individual act, the combined total of all separate acts whether or not related, or a series of acts whether or not related committed by a person acting alone or in collusion with others during the policy period, before the policy period, or both.

Sale and disposal operations are activities conducted by the named insured to reclaim rented storage space when customers' accounts have become delinquent or are unpaid. Generally, this means that the self-storage owner has the right to dispose of property after proper notification to the customer. The length of time for nonpayment and the notification are subject to law.

Securities means negotiable and nonnegotiable instruments or contracts representing money or other property. Redeemed coupons, tokens, tickets, revenue, and other stamps (either actual stamps or unused value in a postage meter) in current use are included as well. Evidences of debt issued in connection with credit cards are securities, as long as the named insured has not issued the cards. Securities does not include money.

For customers' property under employee dishonesty only, theft means “the unlawful taking of property to the deprivation of your customer.”

Endorsements to the MS SF 01

The self-storage facility insured may purchase coverage on a legal liability basis for customers' autos by attaching MS SF 03 05 08. It is not uncommon for customers to rent a space to store an auto. By attaching MS SF 03 Self-storage Facilities—Loss or Damage to Customers' Autos (Legal Liability Coverage), the insurance responds to direct physical loss of or damage to customers' autos and auto equipment while the auto is on the insured premises. An auto when used in this endorsement means a land motor vehicle, trailer, or semi-trailer. Loss must be caused by or result from a covered cause of loss—that is, one not specifically excluded. Loss by theft or conversion caused in any way by an insured is not covered (e.g., the self-storage facility owner mistakenly allows someone to make off with a customer's auto without first checking identification). Coverage is subject to a $250 deductible for each auto for loss caused by theft, mischief or vandalism, subject to a $500 deductible for all loss in any one event. Loss caused by collision is subject to a $500 deductible for each customer's auto. Optional deductibles are available.

The self-storage owner may purchase either or both hired auto and nonowned auto liability insurance by attaching form MS SF 04 05 08. Bodily injury or property damage arising out of the maintenance or use of a hired auto or a nonowned auto by the named insured or an employee in the course of the insured's business is covered. The base limit is $300,000 on a per occurrence basis, and so the limit is not subject to the CGL aggregate limit. However, this coverage is excess over any primary insurance covering the hired or the nonowned auto.

The following bodily injury and property damage liability exclusions of the CGL policy do not apply on this endorsement: contractual liability; liquor liability; employer's liability; aircraft, auto, or watercraft; mobile equipment; damage to property; damage to your product; damage to your work; damage to impaired property or property not physically injured; and recall of products, work, or impaired property. The endorsement adds property damage and bodily injury exclusions for assumption of liability in a contract or agreement; bodily injury to an employee acting in the course of employment or related to the business and the spouse, child, parent, brother, or sister of the employee except when insured assumes liability under an insured contract or for domestic employees not entitled to workers compensation benefits; and property damage to property owned or being transported by or rented or loaned to the insured or in the insured's care, custody, or control.

Three definitions are added: (1) auto business means the business or occupation of selling, repairing, servicing, storing, or parking autos (2) hired auto means any auto you lease, hire, rent, or borrow but does not include any auto you lease, hire, rent ,or borrow from any of your employees, your partners, or your executive officers or members of their households; and (3) nonowned auto means any auto you do not own, lease, hire, rent, or borrow that is used in connection with your business, including autos owned by your employees, your partners, or your executive officers or members of their households, but only while used in your business or your personal affairs.

Equipment breakdown coverage may be added by attaching MS SF 05 05 08, which provides coverage for direct loss or damage to covered property caused by or resulting from mechanical breakdown or electrical failure to pressure, mechanical, or electrical equipment and machinery.

The endorsement removes the following exclusions from the special causes of loss form: artificially generated electrical current, mechanical breakdown, and explosion of a steam boilers, steam pipes, steam engines, or steam turbines that the insured owns or leases or that are operated under the insured's control. The following special causes of loss limitations are also removed via this endorsement: the limitation for steam boilers, steam pipes, steam engines, or steam turbines caused by or resulting from events or conditions inside such apparatus; the limitation for hot water boilers or water heating equipment caused by an event or condition inside the boilers or equipment.

Loss or damage under the form will not be paid until the amount exceeds the deductible shown in the declarations for equipment breakdown protection coverage. If no deductible is shown, the Building and Personal Property form's deductible provision will apply. If two or more deductibles apply, only the largest applicable deductible will be applied.

If the insured has business income coverage, the 72-hour time period in the definition of period of restoration can be amended with this endorsement. If no waiting period is indicated in the declarations, the provisions of the business income coverage apply. If two or more waiting periods apply to the loss, only the longest one will be used.

The following are not included in the meaning of mechanical breakdown or electrical failure to pressure, mechanical, or electrical machinery and equipment: malfunction; leakage of a valve, fitting, shaft seal, gland packing, joint, or connection; damage to any vacuum tube, gas tube, or brush; or the functioning of any protective or safety device.

Use of this endorsement does not increase the policy limits. Coverage may be suspended if equipment is found to be in or exposed to a dangerous condition.

Self-Storage Facilities Supplemental Schedule

A supplemental schedule, MS SF DS 07 13, indicates any increased limits selected by the insured. Where the insurer permits increased limits but the rules do not indicate, the schedule permits a higher entry.