CP 15 32-Civil Authority Change(s)

CP 15 32–CIVIL AUTHORITY CHANGE(S)

(June 2019)

 

gas line break 012

 

INTRODUCTION

The Civil Authority Additional Coverage in the CP 00 30, CP 00 32, and CP 00 50 covers time element losses when access to the covered business is denied by order of a civil authority. The reason for the order must be due to damage to a non-owned structure from a covered cause of loss and the civil authority must either require continual access to the area or the area must be considered too dangerous to allow public access.

The good news is that coverage applies for up to four weeks.

The bad news is that the coverage is available only for businesses that are located one mile from the damaged structure that triggered the civil order.

 

Example: Gingerbread House is located 1.5 miles from a state park. A small bridge provides the only access to the park and Gingerbread. A wildfire in the park forces civil authorities to close all access to the park at the small bridge so they can move firefighters and their equipment in to fight the fire. It takes three weeks to control the fire and extinguish it. Gingerbread is closed the entire time, but it is undamaged, and the damaged structures were more than a mile away. As a result, Gingerbread’s business income coverage does not apply.

 

This endorsement is designed to fill two gaps in coverage. The number of days of coverage for acts of a civil authority and/or the one-mile radius can be increased.

SCHEDULE

This extension of coverage must be selected by premises and building number. If Schedule Part A is selected, the total number of days of coverage needed must be entered. The coverage form provides coverage for 28 days. An entry is required to increase this number of days.

If Schedule Part B is selected, the new radius mileage limitation must be entered. The radius limitation in the coverage form is one mile. An entry greater than one mile is needed in order to extend coverage.

A. Coverage Period

As stated above, Additional Coverages–Civil Authority in CP 00 30, CP 0032, and CP 00 50 is limited to four weeks. If a different period of time is required, the total number of days entered on the Schedule replaces the four weeks in the coverage form.

The time period in the coverage form is stated in weeks while the entry on this endorsement must be entered as a number of days. This means that the entry must be 29 or higher if the goal is to increase coverage. The number of days entered must be considered carefully because the number of days entered completely replaces the four weeks in the coverage form.

 

Number entered

Resulting coverage period

No entry made

Basic four-week period applies

Zero

No coverage applies

6

Six days coverage applies

42

Six weeks coverage applies

 

Note: This is meant to extend a coverage limitation, not restrict it. However, nothing in this endorsement limits its use and its title merely states Civil Authority Change(s). Entries can be confusing because the time period in the coverage form is expressed in weeks while the time period in this endorsement’s schedule is expressed in days.

 

B. Radius

Civil authority coverage applies only if the named insured’s premises is within one mile of the damaged property. Any entry in the schedule replaces the one-mile limitation. Having no entry means the one-mile radius still applies.

Note: Editions prior to the 06 07 edition of CP 00 30 did not have a mileage limitation. In order to match those editions, “Unlimited” is required. Not making an entry means that the one-mile limitation remains in effect. Entering zero could mean the civil authority would apply only if the civil authority closed the business’ actual building.

CONSIDERATIONS

Examples of recent losses where this limitation could have had an impact include the destruction of New York City’s Twin Towers in the 9/11 attack, Hurricanes Katrina, Rita, and Ike, and the western states’ wildfires. Consider explaining to your client why the business across the street had coverage and he or she does not. This endorsement could eliminate the considerable gap introduced with the radius wording and limitation in Additional Coverages–Civil Authority.