How IP Insurance Can Propel Technology Tomorrow

Start-up companies emerging from university research centers hold patents on revolutionary

technologies, but they often lack the funds to enforce them.

Without an investor willing to assume the monetary burden of a long and costly legal proceeding, the startup, despite having a strong, enforceable patent portfolio, has no recourse against an infringer in the marketplace. Thus, startups can only hope to outperform infringers. The reality faced by technology startups, particularly those emerging from university research centers, is that patent protection is absolutely necessary to secure venture funding, but amounts to little more than a paper tiger without the financial ability to enforce them.

The Basic Problem

University technology transfer managers understand this basic problem, but they face challenges unique to the professional intellectual property (IP) world. Often, they are unable to offer any viable solutions to the startup regarding how best to commercially exploit the ideas developed within the schools. They are also faced with meeting the expectations of a strong commitment to the public good by transferring new technology outside of the university and into the public sphere. All must be done within the technology transfer office’s budgetary constraints.

This basic challenge is most pronounced when forming and executing a university patent licensing strategy. Universities struggle to satisfy two opposing and compelling forces. On one hand, as public institutions, universities have a public duty to move knowledge and technology out of its cloistered halls and into the public square sphere to disseminate learning as widely as possible. The public purpose of the university compels licensing agents to be generous in their contract terms and forgiving of infringement. Licensing agents tend to shy away from the aggressive, commercial tactics often used in the diligent IP management of others. Many university technology transfer offices are genuinely reluctant to pursue known patent infringers out of earnest deference to the public mission of the university.

 On the other hand, IP licensing is increasingly seen as an attractive revenue stream, potentially funding expanded operations of the university technology transfer office. More importantly, a consistent outflow of technology startups originating within the university creates an incredibly important regional economic engine. Some observers even view university licensing revenue and the number of new startups as a proxy indicator of a healthy return-on-investment for publically funded research. Within the academic community, a successful technology transfer program strengthens the prestige of the university.

What This Means

The confluence of self interest, public interest, and small budgets puts technology transfer offices and university startups in a difficult position. The peculiar hodge podge of IP incentives, restrictions, and limitations often creates a misalignment of expectations between university IP owners and startups.

To a small university startup with limited funds, the inability to bear the legal costs of a vigorous IP enforcement effort is an operational liability and an unmanaged risk. Because of the unique circumstances of the university technology transfer environment, licensees have little hope of mitigating these risks by routine contractual means alone. Unfortunately, potential investors do not overlook the ease with which large, well-funded firms can out-compete a small startup with “eerily similar” technology. The simple fact remains that neither university technology transfer offices nor university startups are likely to have the ability to pursue infringers in federal court.

The Solution

IP insurance gives the university technology transfer offices, their startups and their investors the ability to effectively leverage their IP rights against potential infringers. IP enforcement insurance is a unique plaintiff’s policy which reimburses the litigation expenses to enforce IP rights against alleged infringers. The policy remedies an investor’s concerns because it provides a source of funds for legal expenses and the litigation management expertise required to effectively utilize those funds.

Without an enforcement policy in place, startups and investors have limited options if they wish to pursue an infringer. The options may be to seek additional funds from investors, finance the lawsuit, or find an attorney to take the case on contingency. These generally are not viable options for startups because:

1.Investors are often reluctant to part with cash for reasons which do not directly contribute to their return.

2.Finding a lending institution willing to loan unsecured funds at terms which are acceptable to the startup may be difficult.

3.Only a small fraction of competent IP litigators are willing to take a case on contingency terms. Usually they want to know the outcome of the case will be a “sure thing” and that the damages to be collected are very high.

An enforcement policy changes the economic environment and assumptions of the infringer. IP litigation is an expensive and risky endeavor. Well-financed infringers rely on the fact that they have the ability to outlast a startup in court. They know that the small company may risk bankruptcy just enforcing their IP rights. Having an IP enforcement policy in place levels the litigation playing field and enhances the likelihood of success for these startup entities.

University technology startups operate with an entirely different set of concerns, limitations, and incentives than their larger corporate counterparts. These differences are neither subtle nor inconsequential. They create a licensing environment that, while attractive for its sheer volume of innovative technology, lacks the basic risk mitigation tools traditionally found in commercial licensing practice, specifically, indemnification of liability and pursuit of infringers. Here exists a superb opportunity for an IP insurance product to fill the risk management void left by the unique circumstances of university technology startups.

 

The undeniable fact is that in the coming years, university licensing will continue to expand and become a more important source of commercialized technology. The speed with which universities can turn laboratory ideas into commercialized goods and services will advance the prestige of the university and strengthen the economic growth of the region it serves. Effectively managing IP risk through IP insurance supports the growth and viability of vulnerable startups while helping meet both the public and self-interest goals of the universities.

Simply stated, IP insurance levels the playing field and enhances the likelihood

of success for these startup entities. IP insurance will continue to be a vital component for the future of university technology licensing.

 

Liabilities Caused By Loose Horses

When a loose horse collides with a car or truck, legal battles can

follow.  Here are a few:

*  The one who owns the damaged car, or who was hurt in a collision with the horse, might seek compensation from anyone connected to the loose horse.  If this happens, it could put the horse owner, the property owner, and the person responsible for keeping the horse are at risk of a lawsuit.

*  The owner of the loose horse might consider a claim against the driver of the vehicle that struck the horse.

*  The horse owner might consider a claim against the person(s) accused of causing the horse’s escape, such as the driver of the delivery truck that broke through the pasture fence before the horses escaped.

*  Depending on the state law, the horse owner or keeper of the loose horse might even face criminal charges, such as fines, imprisonment, or both.

This article generally discusses liabilities involving loose livestock.

 Loose Horse Laws

Across the country, states differ on the liabilities associated with loose horses.  The laws generally fall into these categories:

 Negligence

In many states, a person injured from a loose horse must prove that the horse’s owner or keeper was “negligent” in causing the horse’s escape.  Examples include:

* The horse escaped from a pasture with sub-standard fences or gates.

*  The stable left a gate open or for had inadequate or defective gates from which the horse escaped.
*  The horse had a history of jumping out of his pasture, and the stable knew this but failed to restrain the horse more effectively.

Open Range Districts

A small number of states, or regions within states, have “open range laws” or “open range districts.”  Similarly, some states have designated “grazing areas” or “grazing districts.”  Motorists in these areas truly “drive at their own risk” because livestock can wander freely without fences to contain them.  By law, motorists entering these areas are typically cautioned with warning signs, and if a horse/car collision occurs, the motorist has little or no recourse against the horse owner or keeper.

“Strict Liability” Laws

A few states have “strict liability” laws.  These laws could make the horse owner or keeper automatically responsible for property damages (such as automobile or trailer damage from a collision with loose livestock) and sometimes even for personal injuries caused by a loose horse that enters the roadway.

Criminal Penalties

In some states, owners or keepers of loose livestock could face criminal penalties, such as fines and/or imprisonment.  In a 1994 California case, for example, a stable faced criminal charges of manslaughter after a horse escaped and killed a motorist.  There, evidence proved that the pasture was in dilapidated condition and that horses had escaped many times before.

Defenses

Depending on the facts and law, owners of loose livestock have a few possible defenses.  Here are a few of them:

* The animals were properly restrained and the owner or keeper was not negligent.

*  The animal owner or keeper played no role in its escape because someone else, such as a vandal or a driver who broke the fence, damaged or tampered with the fence and caused the animals to escape.

*  The party that was sued, such as a horse owner, had no control over the manner in which the horse was restrained.

Claims of the Horse Owner

Sometimes, if a motorist kills or injures a loose horse, the horse’s owner could have a claim against the driver for compensation.  In a case from Nebraska, a horse escaped from its pasture and was killed by cars on a highway.  Yet, the horse owner successfully fought back.  He sued the driver of one vehicle whose car had broken through the pasture fence and allowed the horse to escape.  He also sued the driver of another vehicle because evidence showed he was speeding.

Avoiding Liability

Here are some ideas for avoiding liability:

*  Make sure your fencing complies with state or local laws.  Injured motorists, in an attempt to prove that an animal keeper was negligent in allowing its escape, often claim that the fencing was defective and violated state or local fencing laws.

*  Fence inspections.  Injured motorists will scrutinize the attention the fences receive and how often they are checked or repaired.  Livestock facilities that regularly check and repair their pasture fences, gates, and stall latches will withstand these challenges.

*  Liability Insurance.  Liability insurance policies cannot prevent escaping livestock, but you can purchase proper coverage to protect you in case a claim or suit arises.  For example, horse owners who board elsewhere can consider Personal Horse Owner’s Liability Insurance Coverage.  Boarding stable owners can look into policies such as Commercial General Liability Insurance.  Back yard livestock owners can make sure their Homeowner’s Liability Insurance Policies protect them from claims involving loose livestock.

This article does not constitute legal advice.  When questions arise based on specific situations, direct them to a knowledgeable attorney.

About the Author

Julie Fershtman has been a lawyer for over 24 years (as of December 2010) and represents insurers and businesses nationwide on a wide variety of liability and coverage issues.  She is a Shareholder with the Michigan law firm of Foster Swift Collins & Smith, PC.  For more information, visit www.fershtmanlaw.com and www.fosterswift.com.

 

New Commercial Property Forms for 2012

The ISO has submitted significant changes for the Commercial Property Forms that have an effective date of 10/2012.

The changes include:  new edition dates of existing form numbers; forms that are being withdrawn and new forms that are being introduced. The information, upon which this article relies, is the ISO Circular dated January 3, 2012.  This multistate revision will be applicable to the following jurisdictions:

Alabama	Kentucky	Ohio
Alaska	Maine	Oklahoma
Arizona	Maryland	Oregon
Arkansas	Massachusetts	Pennsylvania
California	Michigan	Rhode Island
Colorado	Minnesota	South Carolina
Connecticut	Missouri	South Dakota
Delaware	Montana	Tennessee
District of Columbia	Nebraska	Texas
Florida	Nevada	Utah
Georgia	New Hampshire	Vermont
Guam	New Jersey	Virgin Islands
Illinois	New Mexico	Virginia
Indiana	New York	West Virginia
Iowa	North Carolina	Wisconsin
Kansas	North Dakota	Wyoming

Many of the ISO changes have already been adopted in insurance company forms while other changes represent clarification of the “intent” of the form.  We will include a listing of the forms that will be part of the 10/2012 edition date.  Specifically we will highlight those changes that have any significant impact and new endorsements to the form series.  This chart is a summary of the form changes and each form must be reviewed in its entirety to understand the impact of the changes. As you review the impact of the form changes you will note that there are many instances where there is no change in coverage.  What this means, typically, is that the language of the form has been modified by adding or removing a word or substituting a word that is clearer.  There is no change in the intent of the form.  Some changes result in acoverage increase typically in a sub-limit that is provided.  Some changes result in coverage being reduced for example removing am extension or sub-limit that appeared in a prior edition date.  Some changes will show coverage is broadened which typically means that form language has been added to make the coverage more comprehensive. There are some new endorsements that are being introduced that we will discuss in more detail as they are new to the form series.

NEW ENDORSEMENTS:

Exclusion of Loss Due to By Products of Production or Processing Operations (Rental Properties) CP 10 34

This endorsement is as a result of the landlord/tenant business risks relating to the rental of the property.  While the landlord may enter into a lease that holds the tenant responsible for damages arising from a variety of causes, the insurance contract is not intended to compensate a landlord for the expected consequences of usage of the rental premises as intended. One example provided by the ISO in explanation would be when a premise is leased for use as a restaurant and there is damage from the residue of the cooking operation.  This is deemed a business risk innate to the occupancy not loss compensated by insurance.  This question becomes much more interesting and complex when the property is rented for illegal purposes such as the rental of premises that is used as a methamphetamine laboratory in which the damage from methamphetamine “cooking” operations can be likened to the residue from cooing operations in a restaurant.  Needless to say there are many issues at the heart of this discussion that goes beyond the coverage issue such as:  did the landlord know about the operation; should the landlord have known about the operation and so on.

A case in point that the ISO used in their circular was the Graff v. Allstate Insurance Company, 113 Wash, App.799; 54P.3d 1266 (Wash, Ct. App.2001).  In the case the insured filed a claim for cleanup expenses after a tenant’s methamphetamine laboratory damaged his rental house and the insurer denied the claim citing the policy’s contamination exclusion.  The insured sued and the trial court held in favor of the insured finding that his insurance policy covered the cleanup expenses.  The appellate court affirmed the lower court’s decision and stated that the operation of a methamphetamine laboratory is vandalism and therefore covered under the policy. Thus both the contamination and vandalism issues came into play.  The Insurance company,  (plaintiff),  contended that coverage is not intended to extend to the inevitable effect of a production operation which is emphasized in the language of the Special Form.  As a result of this case and similar claims, the ISO has introduced this endorsement to be attached to all polices issued to owners and tenants of rental property.

Equipment Breakdown Cause of Loss CP 10 46

Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment CP 1047

The ISO is introducing a new Cause of Loss form for Equipment Breakdown that is compatible with the Special Cause of Loss Form. Currently in the Special Cause of Loss Form there are three major categories of exclusions that relate to equipment breakdown:  artificially generated electrical current; mechanical breakdown; explosion of steam boilers…  By use of this new endorsement those exclusions are eliminated.  There are limitations specific to Equipment Breakdown coverage that is then added in the form language.   Ammonia Contamination and Hazardous Substance amounts of insurance can be scheduled on the form. Because of the introduction of the new Equipment Breakdown Form, the ISO has also introduced the Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment to allow the insurance companies to either suspend or reinstate coverage for certain pieces of equipment.

Increase in Rebuilding Expenses Following Disaster CP 04 09

This endorsement is introduced as a response to nationwide disasters and catastrophic events that have tested the limits of the policy as relates costs of labor; cost of materials due to demand and limited resources (demand surge). The ISO circular references Hurricanes Katrina and Rita wherein estimates per square footage of housing reconstruction quadrupled in the first six months after the events.

The new endorsement provides an option for insuring additional expenses when the costs of labor and/or building materials increase as a result of a disaster AND the total cost of repair or replacement exceeds the applicable limit of insurance.  Some significant sections of the endorsement include:

1. Buildings to be insured are indicated on the endorsement
2. Coverage will only apply as a result of an event that is declared a disaster as well as damage resulting from an event which occurs in close proximity to the disaster
3. Coverage is on an annual aggregate basis
4. The maximum amount of additional coverage is determined by applying a specified percentage to the limit of insurance for specific insurance.

Dependent Properties in the Supply Chain (Business Interruption)

Dependent Property Coverage is written by scheduling the business locations that the insured is “dependent upon” and have chosen to insure.  The new endorsement allows for secondary dependencies. An example provided by the ISO of a secondary dependency is a situation in which the insured’s supplier (a dependent property identified in the schedule of the current endorsement) is unable to deliver products/services due to interruption in the business of an entity (for example, a manufacturer) upon which the supplier depends but was NOT a supplier that the insured directly depended upon or was identified in the endorsement.

The new option for covering secondary dependencies is focused on contributing and recipient locations as defined in the form.  Business Income losses arising out of physical loss or damage at the secondary location is subject to the same Limit of Insurance that applies to the scheduled dependent location and does not increase the coverage.  The coverage territory is reiterated on the form to avoid any confusion that the coverage goes beyond the stated territory of the policy for example for locations outside of the United States.

Form	Change	Impact
COVERAGE FORMS
Building and Personal Property Form CP 00 10	Debris Removal: The additional limit provided is increased from $10,000 to $25,000. When no Covered Property sustains direct physical loss there is coverage in the amount of $5,000 provided for removal of debris of others’ property.	Coverage is increased and expanded in definition
Building and Personal Property Form CP 00 10	Fire Department Service Charge: The policy clarifies that the $1000.00 limit provided applies to each premises insured.	No change in coverage
Building and Personal Property Form CP 00 10 (various)	Business Personal Property in Described Structures: The coverage provided for Business Personal Property is clarified to cover both in the building or structures covered in the policy.	No change in coverage
Building and Personal Property Form CP 00 10 (various)	Coverage Radius: The language is clarified as relates “where” coverage must occur for coverage to apply. The form extends coverage to 100 feet from the building or 100 feet from the described premises, whichever distance is greater.	The revision broadens coverage with respect to a tenant in a multiple-occupancy building in such situation where the premises are described in terms of the actual area (quarters) occupied by the tenant. Note: many company forms already include this clarification.
Building and Personal Property Form CP 00 10 (various)	Property in Storage Units: A new coverage extension is introduced on the Commercial Property Form for Business Personal Property Temporarily in Portable Storage Units. The coverage is for 90 days with a sub-limit of $10,000. The property must be located within 100 feet of the described premises. A higher limit can be indicated on the Declarations Page.	This can be considered an extension of coverage, however, if an insurer previously treated property in storage as property in the open then then coverage is decreased to the sub-limit.
Building and Personal Property Form CP 00 10	Newly Acquired Business Personal Property: Currently the Commercial Property forms provide $100,000 additional coverage at each building covering newly acquired business personal property. This provision has been removed. There is no change for newly acquired business personal property located at newly acquired locations. If the insured has “newly acquired” property at their location, the coverage should be increased accordingly to reflect that limit.	Coverage is reduced
Building and Personal Property Form CP 00 10 & Cause of Loss Forms	Vegetated Roofs: This is one of the new “green” extensions in Commercial Property. Currently the property form excludes trees, shrubs, plants and lawns and then sub-limits the coverage. The property form is revised to include lawns, trees shrubs and plants which are part of a vegetated roof and thereby treating such property as an insured part of the building so that an existing vegetated roof can be replaced with like kind in the event of a loss. There are some exclusions that are revised to relate directly to a vegetated roof.	Coverage is broadened.
Building and Personal Property Form CP 00 10 & Business Income Form (various)	Electronic Data in Building Equipment: Currently ISO Commercial Property forms limit coverage for electronic data to $2,500 on an annual aggregate basis. The form is revised to remove the $2,500 limitation with respect to loss or damage to electronic data which is integrated in and operates or controls the building’s elevator, lightning, heating, and ventilation, air conditioning or security systems.	Coverage is broadened
Building and Personal Property Form CP 00 10;Business Income FormCP 00 30/00 32; Cause of Loss Forms(various)	Ordinance or Law Exclusion: The form is revised to include the word “compliance”. The new form states the “enforcement of or compliance with any ordinance or law. This is a clarification of language	No change in coverage
Building and Personal Property Form CP 00 10;Business Income FormCP 00 30/00 32; Cause of Loss Forms(various)	Options for Increasing Specified Limits: The coverage forms currently include the ability to increase coverage via an entry on the Declarations Page for certain categories of coverage. This change allows for increased coverage via Declarations for the additional coverages of Electronic Data; Newly Acquired Locations; Interruption of Computer Operations and Limitations for Theft.	These changes are new coverage options
Business Income Form  CP 00 30 and CP 00 32	Extended Business Income, Extended Period of Indemnity: The Business Income forms provide automatic coverage for 30 days’ following the end of the period of restoration for residual loss of income. The form revises the 30 days to 60 days.	Coverage is increased. Note: Many insurance company forms automatically include more than 30 days.
Cause of LossCP10 10, CP10 20, CP 10 30	Earth Movement Exclusion: The term “earthquake” now incorporates tremors and aftershocks. Language is added to the Earth Movement exclusion to reinforce that earth movement is excluded regardless of whether it is caused by an act of nature or is otherwise caused.	No change in coverage
Cause of LossCP10 10, CP10 20, CP 10 30	Water Exclusion: The Water Exclusion CP 1032 and is now incorporated in the base policy forms	No change in coverage
Cause of Loss CP 10 30	Entrusted Property: The revision is included to distinguish between those who have a role in the insured’s business such as partners/employees and others to whom property may be entrusted such as bailees or tenants. Specifically there is an exclusion for loss or damage caused by…dishonest or criminal acts by…anyone to whom the insured entrusts the property.	Coverage is broadened
Cause of Loss CP 10 30	Wear and Tear Exclusion—Special Form: The coverage is expanded to include coverage for water damage in the “specified causes of loss” to include accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of certain off-premises systems due to wear and tear.	Coverage is broadened
Cause of Loss CP 10 30	Covered Cause of Loss: The term “risk of” is deleted. This change has been done specifically to clarify the collapse exclusion but has a broader impact. This is modified for clarity purposes	No change in coverage
Form	Change	Impact
ENDORSEMENTS
Business Income Report/Work Sheet: CP 15 15	The worksheet has been modified to 60 days rather than 30 days for the Extended Period of Indemnity as modified in the Business Income Form	No change in coverage
Debris Removal and Outdoor Trees, Shrubs and Plants CP 04 15 and CP 14 30	Debris Removal: The $10,000 additional limit for debris removal is increased to $25,000. Note: Many company forms automatically include this limit automatically. Outdoor Trees, Shrubs and Plants: This specifies that debris removal is included in the limit provided for this coverage	Coverage is broadened
Radio or Television Antennas—Business Income or Extra Expense CP 15 50	The endorsement removes a “reference” to the Cause of Loss Earthquake. If the Earthquake Form were attached to the policy it’s terms and conditions are therein specified	No change in coverage
Utility Services—Overhead Transmission Lines CP 04 17 (Direct) and CP 15 45 (Time Element)	The endorsement clarifies that the term “transmission lines” also includes “distribution lines” which is the vernacular in the power industry for a system that provides electricity to residential and commercial users by reducing voltage through the use of substations, transformers and other devices. The forms now reinforce the intent to cover both transmission and distribution systems which serve in the transmission of power or communication service.	No change in coverage
Ordinance or Law CP 04 05; CP 04 38; CP 15 01; CP 15 02; CP 15 08; CP 15 09; CP15 25; CP 15 31; CP 15 34	Ordinance or Law: The endorsement form is revised in the same manner as the exclusion in the Coverage Forms to include the word “compliance”. The new form states the “enforcement of or compliance with any ordinance or law. This is a clarification of language	No change in coverage
Condominium Commercial Unit-Owners Changes—Standard Property Policy CP 17 98	The endorsement modifies three sections of the Condominium Unit Owners Policy: Coverage Radius; Business Personal Property in Described Structures; and Newly Acquired Property. 1. Coverage Radius is modified to state 100 feet from the building or described premises whichever is greater 2. Clarifying that coverage applies both in a building or structure	No change in coverage
Building Glass Tenants Policy Endorsement CP 14 70	This endorsement was first introduced in 2007 to facilitate writing coverage for building glass under a tenant’s policy that did not cover the building. This endorsement simply allows for the deductible for this coverage to be added on the endorsement rather than on the Declarations Page	No change in coverage
Theft Exclusion Endorsement CP 10 33	The Theft Exclusion Endorsement currently does not contain a schedule. The new edition date will display a schedule of locations so that there is clarity as to which location the exclusion applies	No change in coverage
Flood Coverage Endorsement and Schedule CP 10 65; CP DS 65	Currently the Flood Endorsement states there is no coverage for loss from any Flood that begins before or within 72 hours after the inception date of the endorsement. The prior form did not make any distinction concerning renewal policies. The revised form provides that the 72 hour waiting period will not apply when the prior policy included flood coverage and the policy periods are consecutive without a break in coverage.	Coverage is broadened
Payroll Limitation or Exclusion Option CP 15 10	The payroll endorsement is being modified to provide a means of limiting or excluding the payroll expense of “any category of employees or individual employees” The term “ordinary payroll expense” and its definition are removed from the endorsement. The title, also, will no longer refer to the word “ordinary” and the word “ordinary” will no longer appear in other sections such as the “coinsurance section”. The revised endorsement serves the same purpose as the prior one but can be used to address any category of employee on the insured’s payroll.	No change in intent—clarification of definition
Condominium Commercial Unit-Owners Optional Coverage: Loss Assessment CP 04 18	Currently the endorsement places a $1,000 limitation on an assessment as a result of a deductible on the condominium association policy. This endorsement provides a means for selecting a higher limit.	Coverage is broadened
Utility Services—Wastewater Removal (Time Element)  CP 15 45	The Utility Service Time Element endorsement is being revised to add a new category of utility service: wastewater removal property. By definition, wastewater removal property is a utility system for removing wastewater and sewage from the described premises other than a system designed primarily for draining storm water. The utility property includes sewer mains, pumping stations and similar equipment for moving the effluent to a holding, treatment or disposal facility; and includes such facilities.	Coverage is broadened
Earthquake Sprinkler Leakage Deductible CP 10 40; CP 10 45	In 1999, the EQSL Endorsement CP 10 39 was withdrawn from the series and EQSL could be purchased by activating the EQSL ONLY option on the EQ endorsements CP 10 40 and CP 10 45. The revision in this form adds language providing that the EQ deductible provisions outlined in the EQ endorsement (that is, the percentage deductible) do not apply to the EQSL—Only coverage. Instead the Fire deductible applies.	Coverage is clarified and broadened
Builders Risk—Theft of Building Materials, Fixtures, Machinery, Equipment CP 11 21	This change relates back to the issue of “entrusted property” discussed above. Entrusted Property: The revision is included to distinguish between those who have a role in the insured’s business such as partners/employees and others to whom property may be entrusted such as bailees or tenants. Specifically there is an exclusion for loss or damage caused by…dishonest or criminal acts by…anyone to whom the insured entrusts the property.	There is no change in “intended coverage”
Green Upgrades Endorsement Revision CP 04 02	The schedule on the form is revised to identify which property is subject to upgrade when not all personal property is not to be covered for Green Upgrades.	No change in coverage
Form	Change	Impact
NEW ENDORSEMENTS
Exclusion of Loss Due to By-Products of Production or Processing Operations (Rental Properties)  CP 10 34	New form introduced to be attached to policies issued to owners and tenants of rental premises.Discussion of the change is included above.	There is no change in “intended coverage”
Specified Property Away from Premises CP 04 04	New form introduced to provide coverage for business personal property temporarily away from the described premises in the course of daily business activities, while in the care, custody or control of the insured or an employee of the insured.	Coverage is broadened
Higher Limits CP 04 08	Currently the insurance form has many options to increase coverage via the Declarations Page. This endorsement is an alternative to activating the coverages on the Declarations Page by using this multi-purpose endorsement	No change in coverage but new coverage option
Equipment Breakdown CP 10 46	This is a new optional endorsement which is compatible with the Special Form Cause of Loss CP 00 13. Discussion of the change is included above	New Coverage Option
Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment CP 10 47	Because of the introduction of the new Equipment Breakdown Form, the ISO has also introduced the Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment to allow the insurance companies to either suspend or reinstate coverage for certain pieces of equipment. Discussion of the change is included above	New Coverage Option
Deductible By Location CP 03 29	Currently there is a Multiple Deductible Form CP 03 20 adopted in most states which is designed to allow for the selection of different deductible by location and peril. This schedule of endorsement shows separate locations and the deductible for each location.	This is a new optional way to show deductibles but does not affect existing deductible options.
Limitations on Coverage for Roof Surfacing CP 10 36	This endorsement provides options for insuring roof surfacing on an ACV basis and for excluding cosmetic damage to roof surfacing. The cosmetic exclusion option applies only to the perils of wind and hail, and could be written without regard to the underlying valuation clause.	New Coverage Option. This would be chosen by an insurer when they deem it necessary typically on an older building
Increase in Rebuilding Expenses Following Disaster CP 04 09	This is a new endorsement to add additional expenses following a disaster. Discussion of the change is included above	New Coverage Option
Dependent Properties in the Supply Chain (Business Interruption) Endorsement to CP 15 01; CP 15 02; CP 15 08; CP 15 09; CP 15 34.	Dependent Property Coverage is written by scheduling the business locations that the insured is “dependent upon” and have chosen to insure. The new endorsement allows for secondary dependencies. Discussion of the change is included above	New Coverage Option
Discharge From Sewer, Drain or Sump CP 10 38	This is a new endorsement to cover discharge from a sewer, drain or sump and pertains to physical damage and/or time element loss as indicated in the schedule. The amounts stated in the schedule are sub-limits and therefore do not increase the underlying limits of the insurance provided. An annual aggregate limitation can be selected via the schedule on the endorsement.	New Coverage Option
Theft of Building Materials and Supplies (Other Than Builders Risk) CP 10 44	Currently there is a limitation under the Special Cause of Loss form for theft coverage for building materials and supplies that are not part of the building or structure to that which is held for sale by the insured. The new endorsement provides coverage for the theft of building materials and supplies that are located on or within 100 feet of the premises when such property is intended to become a permanent part of the building or structure.	New Coverage Option
Protective Safeguards (Fire) CP 04 11	The new endorsement replaces the interline form IL 04 15. This endorsement, therefore, only pertains to Commercial Property insurance and contains the same provisions as the current endorsement.	No Change in Coverage
Food Contamination (Business Interruption and Extra Expense) CP 15 05	This new option covers extra expenses and business income loses arising out of food contamination and pertains to the Business Income And Extra Expense Coverage Form. Coverage is limited to loss of income/extra expense due to the closure of the business. Covered expenses include: cost of cleaning equipment; cost of replacing food; medical testing and vaccination and advertising expense.	New Coverage Option