In the article Holding Water – Definitions Needed to Understand Water Losses, we defined terms commonly used in both the commercial property policy and the homeowners policy. However, just defining the terms isn't enough to fully understand the coverage. How the terms are used within the policy, and the surrounding language including exclusions and exceptions, is critical to determining whether a given loss will be covered. In this article, we review the terms as found within the ISO CP 10 30 Causes of Loss Special Form, and explain what that means for coverage.

Plumbing, Sewer, Drain

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Plumbing

In the CP 10 30 Causes of Loss Special Form, the term plumbing is used in two sections; the first is in the water exclusion where water, other liquids, and materials that leak or flow from "plumbing, heating, air conditioning or other equipment (except fire protective systems) caused by freezing" is excluded. Coverage exists however if heat has been maintained in the building or the water was turned off and the lines drained. The second is in the definition of water damage within the "specified causes of loss" definition, which is defined as "(1) accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance (other than a sump system including its related equipment and parts), that is located on the described premises and contains water or steam."

Sewer

Sewer is used three times; first in the water exclusion for "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment" and then in the "special causes of loss" definition section defining water damage. In section c.(2) the form reads:

"Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe caused by wear and tear, when the pipe is located off the described premises and is connected to or is part of a potable water supply system or sanitary sewer system operated by a public or private utility service provider pursuant to authority granted by the state or governmental subdivision where the described premises are located."

Drain

The term drain appears twice in the policy but only once regarding a water leak. The first reference is in the water exclusion under "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;" and the second reference is regarding water or other liquid escaping from pipes due to freezing, unless the equipment is drained of the liquid which is not related to our issue.

Backup, Overflow, Discharge

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Backup

The term backup is used only once, again in the water exclusion "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;".

Overflow

Overflow is referenced in the water exclusion twice; first in section (1): "(1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge);" and again under "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;".

Discharge

Discharge is used more than any other of these terms, appearing a total of ten times. However, not all mentions relate to the water issue. Some refer to animal discharge and others to pollution. First, it appears in the exclusion "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;" and then in the exception to the exclusion for a defect in a system from which water escapes, unless that damage "results in discharge of any substance from an automatic fire protection system".

The remaining references are part of the water damage definition that is part of the "specified causes of loss" definition. Under sections (1) and (2) "c.(1) Accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance (other than a sump system including its related equipment and parts), that is located on the described premises and contains water or steam;" and "(2) Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe caused by wear and tear, when the pipe is located off the described premises and is connected to or is part of a potable water supply system or sanitary sewer system operated by a public or private utility service provider pursuant to authority granted by the state or governmental subdivision where the described premises are located."