(June 2019)
The Insurance Services Office (ISO) CP 15 24–Mining Properties–Business Income is mandatory when a mining operation purchases business income coverage. Mining operations must select one of three underground coverage options provided under CP 15 24.
One of the following three options must be selected for each mining location listed and described on the declarations:
Under this option, loss of business income related to direct physical loss or damage to property in underground mines is excluded. There is business income coverage if the loss is due to physical loss or damage to property not in underground mines, even if the underground loss was the proximate cause of the above ground loss.
Under this option, the insurance company pays for loss of business income triggered by direct physical loss or damage to mining machinery and equipment as CP 15 24 defines. The damage must be due to a covered cause of loss that occurs. Coverage does not begin until access to the mining machinery and equipment is gained.
Under this option, the insurance company pays for loss of business income due to direct physical loss of or damage to mining machinery and equipment as CP 15 24 defines. The loss must be due to a covered cause of loss that occurs. It also pays for such loss that prevents restoring or resuming operations because the named insured cannot get to mining machinery and equipment because the covered cause of loss damaged mine shafts, entrances, or passages. This means coverage begins when the direct loss occurs, continues while access is being restored, and ends when either the equipment is replaced and/or restored, or the limit of insurance is used up.
When either of the other options is selected, the coverage becomes
murky because the two options are providing coverage based on the premise that
there is no underground coverage. However, this assumption is not accurate
because the coverage is not excluded under the CP 00 30 and is also not
excluded within this endorsement except when the No Underground Coverage Option
is selected.
Coverage does not apply to any loss of business income due to direct physical loss or damage to commissaries and their warehouses, dwellings, or any other property that does not contribute to a mining plant’s production operations. This includes the contents of any of these.
This section amends the definitions section of the business income coverage form. One term is redefined and a new definition unique to mining operations is added.
This definition is redefined to refer to material that the named insured mines or processes.
This is a new definition. Electric substations, elevators, machinery, shops, fan houses, and rolling stock while situated underground are Mining Machinery and Equipment.
ISO provides a specific set of factors to use to calculate business income premiums for underground mining operations. There is no additional charge if there is no underground coverage. If either limited underground coverage or broad underground coverage is selected, a specific rate for the coverage selected is determined based on the loss cost factor that applies multiplied by the insurance company's loss cost loading factor. The resulting rate is added to the business income rate. That combined final rate is multiplied by the business income limit to generate the premium charge for the coverage.