ISO THEATRICAL PROPERTY COVERAGE FORM

(September 2009)

Menu (click here to expand or to collapse)

INTRODUCTION

The Insurance Services Office (ISO) Theatrical Property Coverage Form insures against direct physical loss or damage to covered property except for causes of loss indicated in Exclusions. It covers losses to scenery, costumes and theatrical property and similar property of others in the named insured's care, custody or control or that it has made partial payments on, all intended to be or having been used in a production indicated on the declarations. Coverage can be written on a specific production or on a blanket basis covering all productions. Coverage applies wherever the traveling company and the production may be.

POLICY CONSTRUCTION

The following forms are mandatory:

Note: Theatrical property coverage may be issued as a stand-alone, monoline inland marine policy or as part of a commercial package policy.

ELIGIBILITY

Any theatrical production or play performed on a stage is eligible. However, since coverage is intended for actual productions, carnivals, circuses, rodeos, costume rental companies or theatrical supply houses are not eligible.

CM DS 16–THEATRICAL PROPERTY DECLARATIONS

CM DS 16–Theatrical Property Declarations does not have a place for the name, mailing address and other named insured identifying information because that information is contained in CM DS 02–Commercial Inland Marine Declarations. CM DS 16–Theatrical Property Declarations contains the following information:

Policy Number

The policy number is entered in the space provided.

Effective Date

The effective date of coverage is entered in the space provided.

Premium For This Coverage Form

The premium for Theatrical Property Coverage is entered in the space provided.

Limits Of Insurance

Separate limits of insurance must be entered in the spaces provided for each of the following coverages desired:

Deductible

The standard $500 deductible the named insured retains for each covered loss applies unless a different amount is entered in the space provided.

Coinsurance

The standard 80% coinsurance clause applies unless a different coinsurance percentage is entered in the space provided. Coinsurance can be deleted by indicating that it does not apply.

Special Provisions

Special Provisions, if any, are indicated in the space provided.

Example of a production that can be insured by this coverage form

FORM ANALYSIS–CM 00 29–THEATRICAL PROPERTY COVERAGE FORM

Note: This analysis is of the 03 10 edition. Changes from the 09 04 edition are in bold print.

CM 00 29 opens by stating that certain provisions restrict coverage and encourages the insured to carefully read it all to understand what is covered, what is not covered, and to determine its rights and duties. It points out that the insurance company uses the terms you and your to refer to the named insured indicated on the declarations and the terms we, us and our to refer to the insurance company providing coverage.

A. COVERAGE

The insurance company pays for direct physical loss or damage to covered property from a covered cause of loss.

1. Covered Property

Note: All property must be in or part of the current play or production, to be used in the play or production, or have been previously used in the production.

2. Property Not Covered

There is no coverage for:

Note: This does not include costume jewelry not having precious stones or metals.

Note: Property excluded is noteworthy and unique relative to the class of business and other property covered. For example, most property coverage forms and policies exclude motor vehicles but this coverage form has an exception that covers vehicles that are part of the production. Similarly, costume jewelry that does not include precious stones or metals is specifically covered in order to differentiate it from jewelry that does. Even though circuses and rodeos are not eligible, animals are still excluded without exception because other coverage forms and policies are available to provide coverage. Along the same line, transportation and admission tickets, while unique to this class of business, are also specifically excluded along with other similar property.

3. Covered Causes Of Loss

This means direct physical loss or damage to the named insured's accounts receivable records by covered causes of loss except those indicated in B. Exclusions.

Note: The words “risks of” before “direct physical” were removed in this edition.

4. Additional Coverage–Collapse

a. This is a sudden falling down or caving in of a building or a part of a building such that it cannot be occupied as intended.

b. The insurance company pays for direct physical loss or damage to covered property because of the sudden collapse of a building or a part of a building that contains covered to which this coverage form applies caused by any one or more of the following:

c. This coverage form's limits of insurance are not increased by this additional coverage.

Note: This change makes this additional coverage the same as in other ISO property coverage forms.

B. EXCLUSIONS

1. These exclusions apply whether or not the loss event results in widespread damage or affects a significant geographical area and are essentially absolute. The insurance company does not pay for loss or damage caused directly or indirectly by any of these exclusions, regardless of any other cause or event contributing to the loss concurrently or in any other sequence.

a. Governmental Action

The insurance company does not pay for loss or damage caused by seizure or destruction of property by order of a governmental authority. This exclusion has an exception for loss or damage caused by or resulting from such ordered acts of destruction at the time of a fire in order to prevent the fire's spread if the insurance provided by this coverage form covers the fire.

b. Nuclear Hazard

There is no coverage for loss or damage from nuclear reaction, radiation, or radioactive contamination from any cause or source. This exclusion has an exception if the nuclear reaction, radiation or radioactive contamination results in fire. In that case, the insurance company pays for the direct loss or damage caused by the fire if the insurance provided by this coverage form covers the fire.

Note: The reference to weapons employing atomic fission/fusion in this edition are eliminated but are still excluded because of the comprehensive manner in which this exclusion is now written. By rewriting this exclusion, the fire exception applies to the weapons but did not in the previous edition.

c. War And Military Action

Loss or damage due to war is excluded. This includes undeclared, civil war or any warlike action by a military force, and actions to hinder or defend against an actual or expected attack by any government or sovereign authority that uses military personnel or other agents. It also includes acts of insurrection, rebellion, revolution, usurped power or action taken by any government authority to hinder or defend against any of these actions.

2. The insurance company does not pay for loss or damage caused by or resulting from any of the following. Some of these exclusions have exceptions, conditions or limitations that should be noted carefully.

a. Theft From Any Unattended Vehicle

Theft of covered property from any unattended vehicle is excluded unless its windows, doors and compartments were closed and locked at the time of the theft and visible signs of forced entry are present.

Note: This exclusion does not apply to property in the custody of carriers for hire.

Example: The Traveling Troupe owned two large furniture moving vans to haul its props, scenery and costumes to cities where it put on plays. Normal procedure called for all items to be moved and secured inside the theater building immediately. However, procedures were not followed and some items were left on the van. The next day, the Troupe discovered that burglars got into the vans and removed the remaining items. This loss would have been covered except that the van had been left unlocked and the burglars only needed to open the doors. Because of this oversight and this exclusion, coverage did not apply.

b. Marring, Scratching, Exposure To Light

Loss or damage by these causes of loss is excluded, as well as by breakage of tubes, bulbs, lamps or articles made mostly of glass, but excluding lenses. However, loss or damage to this property caused by fire, lightning, explosion, windstorm, vandalism, aircraft, rioters, strikers, theft, attempted theft, or accident to vehicles carrying such property is covered, if the insurance provided by this coverage form covers those causes of loss.

Example: The Traveling Troupe had several extensive tableware settings of china and stemware it used with its various productions, including the present one. The moving van took a curve too fast and overturned. When the damage was sorted out, it was discovered that several pieces of china and stemware were damaged. Because coverage applies when a vehicle has an accident, the loss to the damaged items was covered.

c. Delay, Loss Of Use And Loss Of Market

The insurance company does not pay for loss or damage caused by or resulting from these consequential or indirect losses that arise after direct loss or damage.

d. Unexplained Disappearance

Covered property that disappears is excluded. This is where it is simply gone and there is no obvious cause or explanation of what happened to it.

Example: The Traveling Troupe unloaded its vans one night, retired for the evening, returned to the theater the next morning and began to unpack and arrange the property brought in the night before. They suddenly realized that all of the costumes were gone. Everybody remembered bringing them and where they placed them but now they were simply gone. There was no evidence that the building had been broken into or that others had been in the building overnight. In this case, the property that simply "disappeared" was not covered.

e. Shortage Found Upon Taking Inventory

This is similar to unexplained disappearance and is also not covered. In this case, loss of covered property is discovered only after taking a physical count and finding the quantity on hand is not what it should be. This is sometimes referred to as "inventory shrinkage."

f. Dishonest Or Criminal Acts

There is no coverage for loss or damage caused by or resulting from dishonest or criminal acts that the named insured, its partners, employees, directors, trustees, authorized representatives or managers and members of a limited liability company commit. This also includes similar acts by anyone with an interest in the property, their employees or their authorized representatives, as well as anyone entrusted with the property. This exclusion applies whether the persons act alone or in collusion with others or if the acts occur during regular working hours. It does not apply to covered property entrusted to carriers for hire or to acts of destruction by employees of the insured but loss due to theft of covered property by employees is excluded.

g. Processing Or Work Upon The Property

Loss or damage to covered property caused by or resulting from processing or other work performed on it is excluded.

Note: This exclusion has an exception if the activity or work results in fire or explosion. The loss or damage caused by the fire or explosion is covered if the insurance provided by this coverage form covers the fire or explosion.

h. Artificially Generated Current

The insurance company does not pay for loss or damage to covered property caused by or resulting from artificially generated electrical, magnetic or electromagnetic energy that damages, disturbs or interferes in any way to create a short circuit or other electrical disturbance inside covered property consisting of:

Such energy includes electrical current and related arcing, electrical charges from a magnetic or electromagnetic field, pulses of electromagnetic energy, electromagnetic waves or microwaves but is not limited to just these. However, this exclusion applies only to loss or damage to the specific covered property item that has the disturbance.

Note: This exclusion has an exception if the energy indicated above results in fire or explosion. The direct loss or damage caused by the fire or explosion is covered if the insurance provided by this coverage form covers the fire or explosion.

i. Voluntary Parting

Coverage does not apply to loss of covered property because the named insured or others entrusted with it were induced to voluntarily surrender it by a fraudulent scheme, trick, device, or false pretense.

Example: The Traveling Troupe scrambled to get replacement costumes. Since it was performing in a large city, it easily got what was needed but some costumes needed cleaning. A "patron" of the theater, stating that he owned a dry cleaning establishment, offered to clean the costumes without charge. The Troupe eagerly and willingly accepted this gracious gesture after everything else it had been through. Whether the costumes ever got cleaned was not known because both the patron and the costumes disappeared without a trace. Of course, this exclusion applied and there was no coverage for the costumes that had been willingly given away under false pretenses.

j. Unauthorized Instructions

The insurance company does not pay for loss or damage caused by or resulting from instructions to transfer property to another person or place without proper authorization.

k. Neglect

There is no coverage for loss or damage caused by or resulting from failure of an insured to do everything possible at the time of loss and afterwards to save property and preserve it from further damage.

3. The insurance company does not pay for loss or damage caused by or resulting from any of the following loss events. In each case, if loss or damage by a covered cause of loss occurs as a result of one of these events occurring, coverage applies to the loss or damage caused by the resulting covered cause of loss event.

a. Weather Conditions

Coverage does not apply to loss or damage caused by weather conditions. This exclusion applies only if the weather condition contributes in any way with an excluded cause or event indicated in Paragraph 1. that produces the loss or damage.

b. Acts Or Decisions

The insurance company does not pay for loss or damage caused by or resulting from acts or decisions made by any person, group, organization or government entity that results in loss or damage. This includes failure to act or make a decision.

c. Faulty, Inadequate Or Defective Planning

There is no coverage for loss or damage caused by or resulting from erroneous planning, zoning, development, surveying or siting of all or any part of any property, regardless of where it is located. This also applies to design, specifications, workmanship, repair, construction, renovation, remodeling, grading or compaction activities, as well as to materials used in repair, construction, renovation, remodeling or maintenance.

d. Collapse

Collapse is excluded. This includes the following conditions in the property or any part of it:

Note: This exclusion does not apply with respect to the coverage provided under Additional Coverage–Collapse or to collapse caused by fire, lightning, windstorm, hail, explosion, smoke, aircraft, vehicles, riot, civil commotion, vandalism, leakage from fire extinguishing devices, sinkhole collapse, volcanic action, breakage of building glass, falling objects, weight of ice, sleet or snow, water damage, earthquake, weight of people or personal property on or in the building or structure or weight of rain collecting, pooling or accumulating on a roof.

e. Wear And Tear

Loss or damage caused by wear and tear is excluded. This also includes qualities in covered property that cause it to damage or destroy itself, as well as latent defect, gradual deterioration, depreciation, mechanical breakdown, insects, vermin, rodents, corrosion, rust, dampness, heat or cold.

C. LIMITS OF INSURANCE

The limits indicated on the declarations are the most paid for loss or damage in any one occurrence.

D. DEDUCTIBLE

The insurance company pays only the amount of loss or damage in any one occurrence that exceeds the deductible amount indicated on the declarations.

E. ADDITIONAL CONDITIONS

1. Coverage Territory

The insurance company insures covered property anywhere in the United States of America, its territories and possessions, Puerto Rico and Canada.

2. Coinsurance

This condition applies if a coinsurance percentage is indicated on the declarations.

The insurance company does not pay the full amount of any loss if the value of covered property at the time of loss multiplied by the coinsurance percentage indicated on the declarations exceeds the limit of insurance. The steps the insurance company takes to determine the amount it pays are as follows:

a. Multiply the value of covered property at the time of loss, excluding covered property in transit, by the coinsurance percentage that applies.

b. Divide the limit of insurance of the covered property by a. above.

c. Multiply the total amount of loss by b. above.

d. Subtract the amount of deductible from c. above.

The insurance company pays the amount in d. above, or the limit of insurance, whichever is less. The named insured is responsible for any amounts not paid if other insurance is not available.

ENDORSEMENTS

There are no specific endorsements available for use with the Theatrical Property Coverage Form.

UNDERWRITING CONSIDERATIONS

Since coverage applies to property not usually at a single, fixed location, a number of other issues must be considered and addressed, such as where is the property kept? What is the nature of the traveling production or troupe, if it does not have a permanent home? A defined storage location is helpful in the overall exposure analysis. Having one person in charge of the property is also important because that person must maintain the records the insurance company needs for rating as well as for claims and loss adjustments.

Other questions include where is damaged property repaired? Are costumes, scenery and props stored separately in order to prevent smoke damage and reduce the spread of fire?