Introduction to the BPP Form
The Building and Personal Property (BPP) Coverage Form (CP 00 10) is the primary form used to insure commercial buildings and the contents within them. As a foundational element of the complete Commercial exam guide, understanding the BPP form is essential for any aspiring insurance professional. This form identifies what property is covered, what property is excluded, and how the policy responds to various loss scenarios.
The BPP form is typically part of a Commercial Package Policy (CPP) or a monoline property policy. It provides coverage for direct physical loss of or damage to covered property at the premises described in the declarations. To master this topic for the practice Commercial questions, you must distinguish between the three main categories of covered property: Building, Your Business Personal Property, and Personal Property of Others.
Primary Categories of Covered Property
| Feature | Category | Definition & Scope | Key Examples |
|---|---|---|---|
| Building | The structure described in the declarations, including completed additions and fixtures. | Permanently installed machinery, outdoor fixtures, and floor coverings. | |
| Your Business Personal Property (YBPP) | Property owned by the insured and used in the business, located in or within 100 feet of the premises. | Furniture, fixtures, machinery, equipment, and 'stock' (merchandise). | |
| Personal Property of Others | Property owned by others but in the care, custody, or control of the insured. | Customer goods in for repair, leased equipment the insured is required to insure. |
Deep Dive: Building Coverage
In the BPP form, "Building" is defined more broadly than just the four walls and a roof. For the exam, remember that Building coverage includes:
- Completed Additions: Any extensions to the structure that are finished.
- Fixtures: Items that are permanently attached to the building, such as plumbing, HVAC systems, and lighting.
- Permanently Installed Machinery and Equipment: This includes elevators or built-in manufacturing equipment that cannot be easily moved.
- Personal Property Used to Maintain the Building: This is a critical distinction. Items like fire extinguishers, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing, or laundering are all considered part of the Building coverage.
- Additions Under Construction: Materials, equipment, supplies, and temporary structures used for making additions or alterations to the building, provided they are within 100 feet of the premises.
The 100-Foot Rule
A common exam question involves the geographical limit for Your Business Personal Property (YBPP). Coverage applies while the property is in or on the building described in the declarations, or in the open (or in a vehicle) within 100 feet of the building or premises.
Your Business Personal Property (YBPP)
YBPP covers the contents of the business. This includes most items that are not permanently attached to the structure. Key components include:
- Furniture and Fixtures: Desks, chairs, and shelving.
- Machinery and Equipment: Portable tools, computers, and specialized trade equipment.
- Stock: This refers to merchandise held in storage or for sale, raw materials, and in-process or finished goods.
- Leased Personal Property: If the insured has a contractual responsibility to insure leased equipment, it falls under YBPP.
- Labor, Materials, or Services: If the insured has performed work on the personal property of others, the value of that labor and those materials is covered under YBPP (while the property itself is covered under Personal Property of Others).
Property Not Covered
The BPP form contains a specific list of property that is not covered. This is often done to avoid duplicating coverage found in other forms (like Commercial Auto or Inland Marine). Excluded items include:
- Accounts, Bills, Currency, and Deeds: These are considered "money and securities" and require different coverage.
- Animals: Unless they are boarded or held as stock (like in a pet store).
- Bridges, Roadways, Patios, and Walkways: These paved surfaces are excluded.
- Contraband: Property in the course of illegal transportation or trade.
- Land and Water: The cost of excavations, grading, backfilling, or filling is excluded.
- Vehicles: Licensed for use on public roads or those operated away from the premises.
- Outdoor Property: Specifically fences, radio/TV antennas, trees, shrubs, and plants (though limited coverage may be added back via Coverage Extensions).
Additional Coverages and Limits
Coverage Extensions
Coverage extensions only apply if the policy has a Coinsurance percentage of 80% or higher. These extensions provide additional amounts of insurance for specific situations:
- Newly Acquired or Constructed Property: Provides temporary coverage for new buildings (up to $250,000) and new personal property (up to $100,000).
- Personal Effects and Property of Others: Provides up to $2,500 for the personal effects of the insured, partners, or employees.
- Valuable Papers and Records: Provides up to $2,500 to research or replace lost information.
- Property Off-Premises: Provides up to $10,000 for property temporarily at a location the insured does not own or lease.
- Outdoor Property: Provides limited coverage (often $1,000 total, with a sub-limit per tree/shrub) for loss by fire, lightning, explosion, riot, or aircraft.