Topics covered:

Coverage

Property not covered

Causes of loss

Additional Coverages (Paragraph 4)

Additional Coverages (Paragraph 5)

Exclusions

Limits of Insurance and Deductible

Additional Conditions

Definitions

Declarations

Application

Coverage

A.  Coverage

We will pay for direct physical loss of or damage to Covered Property from any of the Covered Causes of Loss.

1.Covered Property

Covered Property, as used in this Coverage Form, means personal property of others that is in your care, custody or control.

 Analysis: 

IH 00 85 declares that the insurer will pay for direct physical loss of or damage to covered property from any of the covered causes of loss. The property that is covered under this form is the personal property of others that is in the care, custody, or control of the named insured. Dry cleaners are a common example of bailees, as are tv and appliance repairers, furniture repairers, carpet cleaners, and other such services.

The coverage form applies to direct physical damage and not to any consequential losses, or loss of use. Damage must be to the actual property; for example the suit left at the dry cleaners must be damaged; the owner's inability to wear the garment to court because the cleaner was behind on his orders is not covered. The covered causes of loss are all risks of direct physical loss or damage except those causes of loss listed in the exclusions section of the policy; in other words, IH 00 85 is an open perils type coverage form, which is in keeping with an inland marine form.

Property Not Covered

2.  Property Not Covered

Covered Property does not include:

1. Accounts, bills, currency, documents, records, deeds, evidences of debt, money, notes, securities or stamps;
2. Animals, birds or fish;
3. Automobiles, motor trucks, trailers or other vehicles that are licensed for use on public roads and are used to transport persons or property;
4. Aircraft or watercraft;
5. Furs, fur garments or garments trimmed with fur;
6. Jewelry, watches, precious or semiprecious stones, bullion, gold, silver, platinum or other precious metals or alloys;
7. Property while in the custody of other bailees unless the property is:

(1) At a premises described in the Declarations; or

(2) In the custody of a carrier for hire;

h. Property while waterborne except while on ferries operating on the navigable waters of the Continental United States other than to and from Alaska;

i. Property that you have accepted for storage or for which you have issued a storage certificate. But if a Limit Of Insurance is shown in the Declarations for storage, property that you have accepted for storage is covered at the described premises, if you have issued a storage certificate for such property;

j. Property shipped by mail; or

k. Contraband, or property in the course of illegal transportation or trade.

l. "Data" or "media".

 Analysis

The list of property not covered is extensive; much of the property is better covered under separate policies. Automobiles at a shop, for example, are covered under a garagekeepers or other commercial policy. Banks have special coverage for currency on deposit at their institution. Property while in the custody of other bailees is if the insured is a dry cleaner and sends customers' shirts off-premises to another dry cleaning company for processing; it is out of the bailee's hands, therefore this policy does not apply. This form does not provide coverage unless the property is at a premises described in the Declarations, or in the custody of a carrier for hire.

Newly added to the list of property not covered in the 2020 form are "data" and "media", both defined terms in the policy, as these types of property are more appropriately covered under a commercial property or electronic data policy. "Data" is defined as data stored on "media"; and programming records used for electronic data processing or electronically controlled equipment.  "Media" means electronic data processing, recording or storage media such as software, films, tapes, discs, drums or cells. 

Causes of Loss

3. Covered Causes Of Loss

Covered Causes of Loss means Direct Physical Loss Or Damage to Covered Property except those causes of loss listed in the Exclusions.

 Analysis:

As mentioned earlier, this is an open perils policy; every type of peril is covered unless specifically excluded in the exclusions section of the form.

Additional Coverages (Paragraph 4)

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4. Additional Coverages

The Limits of Insurance shown in Paragraph A.4. Additional Coverages are provided within, not in addition to, the Limit Of Insurance stated in the Declarations as applicable to the Covered Property, except with respect to Debris Removal Additional Coverage in Paragraph A.4.b.(3). 

Analysis:

New with the 12 20 edition of IH 00 85 are another section of additional coverages, with both paragraphs 4. and 5. containing additional coverages. Unless otherwise stated, the loss occurrence deductible will apply to the additional coverage.

In paragraph 4., with the exception of the additional debris removal limit described in (3)(b), the additional coverages are provided within the limit of insurance, and are not increased limits of coverage.

Paragraph 5. additional coverages are also provided within the limit of insurance, and are not increased limits of coverage, the difference being that there are no exceptions.

a.  Misidentification Of Property

We also will pay for loss or damage resulting from misidentification of the Covered Property caused by a Covered Cause of Loss.

b.  Debris Removal

(1) We will pay your expenses to remove debris of Covered Property caused by or resulting from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date of direct physical loss or damage.

(2) The most we will pay under this Additional Coverage is 25% of:

(a) The amount we pay for the direct physical loss or damage to Covered Property; plus

(b) The deductible in this Policy applicable to that loss or damage.

(3) Payment under this Additional Coverage will not increase the applicable Limit of Insurance, but if:

(a) The sum of direct physical loss or damage and debris removal expense exceeds the Limit of Insurance; or

(b) The debris removal expense exceeds the amount payable under the 25% limitation; we will pay up to an additional $10,000 in any one occurrence under this Additional Coverage.

(4) This Additional Coverage does not apply to costs to:

(a) Extract "pollutants" from land or water; or

(b) Remove, restore or replace polluted land or water.

Analysis:

The coverage form covers loss or damage resulting from misidentification of the covered property caused by a covered cause of loss. For example, if a bailee's shop burns, it may be difficult to sort out different customers' property correctly; this is covered.

The form pays for expenses to remove debris of covered property caused by or resulting from a covered cause of loss that occurs during the policy period. There are some restrictions on this coverage that should be noted. The expenses will be paid only if they are reported to the insurer in writing within 180 days of the date of loss.

The most that will be paid is 25 percent of the amount paid for the direct physical loss plus the deductible. Payment under this additional coverage does not increase the applicable limit of insurance, but if the debris removal expense exceeds the amount payable under the 25 percent limitation, the insurer will pay up to an additional $10,000 in any one occurrence, which is a newly increased limit in the 12 20 edition of the form.  Further, this additional coverage does not apply to costs to extract pollutants from land or water, or to remove, restore, or replace polluted land or water.

For example, the coverage limit is $100,000. The insured suffers a fire loss and damage to property in the insured's custody is $40,000. The form will pay 25% of the amount paid for the damage, which would be $10,000, or 25% of the $50,000, which is the amount paid for damages.