CO 1201 –COMMERCIAL OUTPUT PROGRAM GREEN COVERAGE ENDORSEMENT

(August 2019)

INTRODUCTION

This is an endorsement and is subject to all the terms and conditions in CO 1000– Commercial Output Program–Property Coverage Part, unless specifically modified or otherwise provided for in this endorsement.

Some businesses have always operated in an environmentally conscious way as a matter of principle. Recently, other businesses are joining them because of their environmental concerns but also as a way to guarantee a constant utility flow and for long-term utility costs savings. The unendorsed property coverage part valuations are not green sensitive, so this endorsement allows the green named insured to match coverage to need.

SCHEDULES

CO 1087–Green Coverage Schedule

Green Building Coverages

This section’s coverages are available only for buildings that have received a green certification. A check must be placed beside either Green Building Coverages Not Provided or Green Buildings Coverage Provided. If the Green Buildings Coverage Provided is selected, CO 1088–Schedule of Green Buildings Green Building Coverages must be attached to schedule the building and the coverage and limits that apply to that building.

Non-Green Building Coverages

This section’s coverages are available to buildings that are not certified green but for which certain green updates are desired if a loss should occur. A selection must be made for either Coverages Not Provided or Coverages Provided. If the Coverages Provided is selected, CO 1089–Schedule of Green Buildings Non-Green Building Coverage must be attached to schedule the building and the coverage and limits that apply to the building.

Green Income Coverages

This section’s coverages are optional and available to both green and non-green building coverages. The following coverages can be selected:

Green Building Alternatives – Increased Restoration Period. The number of days must be entered if the coverage is selected.
Renewable Energy Generating Equipment. The limit must be entered if selected.

Alternative Certification Company

The term green certification refers to the rating provided by either Green Globes or LEED (Leadership in Energy and Environmental Design). If an alternative company is used for the green certification, that alternative company must be listed in this section.

CO 1088–Schedule of Green Buildings Green Building Coverages

If Green Buildings Coverage is selected on the CO 1087, this schedule must also be attached. For each scheduled location a selection of one or more of the following must be made and a limit added.

Indoor Air Quality
Recycling Debris
Recertification
Electricity or Water Replacement
Vegetative Roofs

Only two buildings can be added to a schedule so multiple schedules may need to be attached.

Note: There are no default limits. No coverage is provided when a coverage selection appears without a limit.

CO 1089–Schedule of Green Buildings Non-Green Building Coverages

If Non-Green Buildings Coverage is selected on the CO 1087, this schedule must also be attached. For each scheduled location a selection of one or more of the following must be made and a limit for that coverage provided.

Personal Property Upgrade
Interior Finish Materials Upgrade
Interior Plumbing Systems Upgrade
Interior Lighting Systems Upgrade
HVAC Equipment Upgrade
Roof Upgrade
Recycling Debris

Only one building can be listed on each schedule, so multiple schedules may be needed.

Note: There are no default limits. No coverage is provided when a coverage selection appears without a limit.

CO 1201–GREEN COVERAGE ENDORSEMENT

Note: All items in this endorsement are additions to CO 1000–Commercial Output Program–Property Coverage Part.

Additional Definitions

1. Appliances

A listing of specific items is provided in this definition. It does not use the word “including” or the term “such as.” This means that only the 15 items in the definition are considered appliances. When the term appliances is used in this endorsement it means one or more of the following:

Dishwasher	Refrigerator	Freezer
Oven	Microwave oven	Toaster
Toaster oven	Coffee maker	Water cooler
Room air conditioner	Room air cleaner	Space heater
Water heater	Clothes washer	Clothes dryer

2. Electronic Equipment

A specific list appears under this term. It does not use the word “including” or the term “such as.” This means that only the 19 listed items in the definition are considered electronic equipment. When the term electronic equipment is used in this endorsement it means one or more items on this list.

Note: This definition could lead to some confusion because it includes generic references so that an argument could be made that the list is not inclusive.

Fax machine	Copier	Mailing machine
Electronic stapler	Telephone	Telephone switchgear (this includes PBX systems)
Other related telephone hardware	Television	Radio
VCR equipment	DVD players and recorders	CD players and recorders
Video conferencing equipment	Audio equipment	External power adapters
Label machine	Hardware (this is a defined term in the CO 1000)

3. Energy Star

This is a rating standard from the U.S. Environmental Protection Agency and the U. S. Department of Energy. The intent of providing this standard is to help consumers save money while protecting the environment by using energy-efficient products and practices.

4. Furniture and furnishings

A listing of specific items is provided in this definition and the wording suggests that it is meant to be exclusive. Therefore, when the term furniture and furnishings is used in this endorsement it means one or more of the following:

Sofa	Filing cabinet	Stools
Desk	Lamps	Tables
Wall clock	Chairs	Bookcases
Benches	Artificial plants

5. Green

This very broad definition relates to products, materials, methods, and processes. In order to be considered green, they must improve air quality inside a building and, in other ways, protect the health of the building occupants while also improving productivity. In addition, they must use recycled materials, use less energy, send out fewer pollutants, and generate less waste.

Note: The words ‘less’ and ‘fewer’ are used but the definition doesn’t say less or fewer than what. It is a very inexact and over-reaching definition.

6. Green certification

A certification granted to a building by LEED, Green Globe or an alternative certification company. If the certification is from an alternative certification company, that company name must be entered on CO 1087–Green Coverage Schedule.

7. HVAC equipment

All heating, cooling, and ventilation equipment is covered by this definition. The following listing provides items that are definitely included in this definition, but the term is not limited to only them:

Heat pump	Boiler	Central air conditioning
Window air conditioning unit	Ceiling fan	Dehumidifier
Exhaust fan	Furnace	Thermostat
Ventilating fan

8. Interior finish materials

A listing of specific items is provided in this definition. It does not use the term “including” or the term “such as.” This means that only the listed items in the definition are considered interior finish materials. When the term interior finish material is used it means one or more of the following:

Carpet	Floor coverings	Tile
Wall coverings	Interior painting	Architectural coatings
Primer	Undercoating	Adhesives
Sealants	Composite wood fixtures but only if permanently installed

9. Interior lighting systems

All lighting within a building is included in this definition. Light bulbs, fluorescent and HID lighting fixtures, and ballasts are examples of covered items, but other lighting items are included as long as they are inside the building.

10. Interior plumbing systems

All plumbing within a building or structure is included in this definition. Toilets, urinals, hot water heaters, faucets, and showerheads are examples of covered items, but other plumbing items are included as long as they are inside the building.

11. Light commercial HVAC equipment

These are HVAC systems that are used by small commercial operations but that are more similar to residential units. Small package units, heat pumps, air conditioner, and split systems are examples of these light systems.

12. Renewable energy generating equipment

Equipment that uses renewable resources to generate energy is included in this definition. Examples such as solar, wind, geothermal, low-impact hydro or bio-mass/bio-gas systems are listed but this is not an exclusive listing.

13. Seating

These are chairs that are used with system furniture that is defined below. These can be task, desk or guest chairs.

14. System furniture

These are components that establish workspaces. A workstation and all of its components, panels, and drawers are considered system furniture. Items that are free standing but that have components which are meant to work together are also system furniture.

15. Water conservation system

Any system within 500 feet of a covered building built to collect rainwater or groundwater. It can also be designed to circulate gray, ground, or rainwater. This does not include any plumbing system that is designed solely for the purpose of landscape irrigation.

Green Building Coverage

Example: Meg and Peg Inc. is an environmentally sensitive cabinet manufacturer. The manufacturing takes place in their green certified building. They have two retail outlets located in specialty malls. The outlets need to have extensive green upgrades. We’ll use Meg and Peg Inc. in examples throughout this analysis.

The following additional coverages are available only for buildings that have a green certification. They pay costs incurred to return the building to compliance with its certification. Covered buildings referenced in this coverage are only those buildings listed on the CO 1088–Schedule of Green Buildings Green Building Coverages.

Example: Meg and Peg Inc. schedule its manufacturing building under Green Building Coverage and select all coverages. When an explosion in the plant damages 60% of the building, Meg and Peg Inc. is looking for an equitable settlement.

1. Indoor Air Quality

Coverage applies only if it is selected on CO 1088–Schedule of Green Buildings Green Building Coverages.

If direct loss or damage due to a covered peril occurs at a covered building, the costs to restore the building to its pre-loss indoor air quality are covered. The costs will pay to bring it up to no more than the standard outlined in the Indoor Air Quality Management Plan as required in the building’s green certification.

The costs to restore the air quality include the following:

Air quality testing but only for indoor
Green certification required air flushing
Filter replacement. The costs of filters that process outside air are not included.

The costs paid will not exceed the limit for this coverage at the specific location on CO 1088–Schedule of Green Buildings Green Building Coverages.

Example: An air quality test must be conducted following the repairs in order to determine if the air meets the green certification levels. The test costs $5,000 and shows that the air must be flushed in order to meet green certification requirement. Meg and Peg Inc. spend $25,000 to flush out the air. Part of the problem was that the building’s filter was overburdened by the loss and, although it is not damaged, it must be replaced in order to keep the air quality at the approved level. The new filter costs $3,000. The limit of insurance scheduled for this coverage is $50,000, so all costs are covered.

2. Recycling Debris

Coverage applies only if it is selected on CO 1088–Schedule of Green Buildings Green Building Coverages.

If direct loss or damage due to a covered peril occurs at a covered building, the costs incurred to send debris to a recycling facility rather than to a landfill are covered. It applies only if the items can be recycled. This is diverting coverage so that it pays the difference in cost of sending the items to recycle rather than to the landfill. The standard debris coverage will pay for the debris removal cost.

The costs paid will not exceed the limit for this coverage at the specific location on CO 1088–Schedule of Green Buildings Green Building Coverages.

Example: The debris removal expense is $25,000 but Meg and Peg Inc. insists on recycling as much as possible. This diversion costs an additional $15,000 but because the company has $25,000 recycling debris coverage, the insurance company pays a total of $40,000 to dispose of the debris.

3. Recertification

Coverage applies only if it is selected on CO 1088–Schedule of Green Buildings Green Building Coverages.

If direct loss or damage due to a covered peril occurs at a covered building, the costs incurred to recertify the damaged building or structure are covered. The costs include all required fees along with the costs of hired certified consultants and engineers.

The costs paid will not exceed the limit for this coverage at the specific location on CO 1088–Schedule of Green Buildings Green Building Coverages.

Example: The building is ready to be occupied. Meg and Peg Inc. want to maintain its green certification and, therefore, must submit applications and hire the necessary experts to inspect and report on the buildings’ condition. This cost is $3,000 and is paid for because the coverage was scheduled for $5,000.

4. Electricity or Water Replacement

Coverage applies only if it is selected on CO 1088–Schedule of Green Buildings Green Building Coverages.

Loss or damage to the named insured’s equipment used to generate its own energy or the system it uses to conserve water will force the named insured to pay its public utilities for electricity and/or water. Those payments are covered if the equipment or system damage is due to a covered peril. Payments are for only the amount of electricity and/or water that would have been available for the time period and are available only until the equipment is brought back to the equipment manufacturer’s specifications or the end of the policy period, whichever is sooner.

The payments will not exceed the limit for this coverage at the specific location on CO 1088–Schedule of Green Buildings Green Building Coverages.

Example: Meg and Peg Inc. generate 80% of its own energy by using cabinet manufacturing waste and wind power. It has a gray water recycling system that allows it to reduce its water and use to only 25% of normal demand. An explosion occurs in the energy recycling area. Although Meg and Peg Inc. can continue operations, its utility costs will increase by $7,000 a month until the necessary replacement is made. The coverage limit available is $60,000 so if the energy recycling equipment is replaced in less than eight months, there should be enough coverage. However, if the policy expiration occurs before the equipment is replaced coverage ends, even if the limit has not yet been used up.

5. Vegetative Roofs

Coverage applies only if it is selected on CO 1088–Schedule of Green Buildings Green Building Coverages.

The costs to repair, replant, or rebuild a vegetative roof on a covered building are covered if the loss or damage is due to a covered peril. Only costs that will pay to bring it up to no more than the standard required in the building’s green certification are covered.

Damage to vegetative roofs from the following perils is not covered under this green coverage:

Atmosphere dampness or dryness
Temperature changes or extreme
Wind, hail, rain, snow, dust, ice, sleet
Disease

The costs paid will not exceed the limit for this coverage at the specific location on CO 1088–Schedule of Green Buildings Green Building Coverages.

Note: The Trees, Shrubs, and Plants supplemental coverage section limit in the property coverage part is not to be combined with this coverage.

Example: The explosion caused part of the roof to collapse into the building. The cost to repair the roof is covered under the CO 1000 but the $3,000 cost to replace and replant the vegetation on the roof is only covered under this coverage. The scheduled limit for this is $10,000, so the damage to the roof is fully covered.

Non-Green Building Coverages

The following additional coverages are available only for buildings that do not have a green certification. They pay costs incurred to upgrade damaged property with green products. Covered buildings referenced in this coverage are only those buildings listed on the CO 1089–Schedule of Green Buildings Non-Green Building Coverages.

1. Personal Property Upgrade

Coverage applies only if it is selected on CO 1089–Schedule of Green Buildings Non-Green Building Coverages.

If the cost of repairing or replacing damaged covered personal property with green products is more than the cost to replace or repair it with the standard like kind and quality, this coverage will pay for those additional costs. The loss or damage must be due to a covered peril and the green replacement product must either be up to green certification standards or have an energy star designation.

This coverage applies only if there is a green product equivalent and for property that is inside a covered building or structure. The only exception to personal property being inside the building is mobile equipment which can be inside or outside the building.

Only the following six types of personal property are covered under this upgrade coverage:

Electronic equipment
Appliances
System furniture
Seating
Furniture and furnishings
Mobile equipment

Note: All of these items are specifically described in the definitions section of this coverage endorsement or the property coverage part. It is important to review those definitions to know exactly what personal property is covered.

Stock that is held for sale is not covered. The definition of stock includes the raw material that will be used to make the stock and any stock that is in process.