Curd Appeal sells the best-looking cheeses on the block, but over the long weekend their refrigerator broke down, and now their limburger isn't the only thing that smells. The owner argues they are covered under the BP 00 03, but the adjuster spots some holes in their argument. The owner hits back with a supplemental endorsement they purchased, hoping to find coverage any way they can.
Notable Timestamps
[ 03:00 ] - The five-point process for property coverage analysis includes: covered property, direct physical loss, covered cause of loss, conditions, and additional coverages/extensions.
[ 04:37 ] - Mechanical breakdown (like a refrigerator going out) is often an excluded cause of loss in a standard policy.
[ 07:18 ] - Supplemental endorsements for food spoilage are designed to work with the base policy and can specify limits and change base policy language.
[ 08:59 ] - This food spoilage coverage extension insures against direct physical loss or damage to food stock or food merchandise contained in a refrigeration unit.
[ 10:47 ] - The endorsement defines a covered cause of loss to include mechanical breakdown and power outage (change in temperature/humidity).
[ 12:31 ] - This food spoilage endorsement often explicitly deletes the mechanical breakdown exclusion from the base policy, but only for that specific coverage extension.
[ 13:41 ] - The food spoilage extension may only apply if the loss is not covered by Equipment Breakdown Insurance (an optional policy coverage).
[ 14:10 ] - The optional Equipment Breakdown Protection Coverage in the BP 00 03 policy covers direct loss or damage caused by mechanical breakdown or electrical failure of machinery.
[ 15:33 ] - The Equipment Breakdown Protection Coverage might exclude leakage at a valve or seal, which is a distinction that could make the supplemental endorsement the only source of coverage.
[ 18:31 ] - Brennan provides a recap of the points above.
Your PLRB Resources
Property Question of the Week: Food Spoilage under BP and CP Forms – No Off-Premises Power Outage - https://www.plrb.org/documents/food-spoilage-under-bp-and-cp-forms/
Property Question of the Week: Mechanical Breakdown of Freezer: Food Covered? - https://www.plrb.org/documents/mechanical-breakdown-of-freezer-food-covered/
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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