MSO BUSINESSOWNERS PROGRAM OVERVIEW

(August 2019)

INTRODUCTION

The Mutual Service Office, Inc. (MSO) is the oldest continuously operating multi-state rating bureau in the country. It was organized in 1944 and served only New Jersey and nearby Mid-Atlantic States until just recently. In 2011 and 2012 it launched itself into all 48 contiguous states which is why its forms are being analyzed by PF&M.

TRIGGER ENDORSEMENTS

MSO uses a unique coverage approach called the trigger endorsement concept. The wording of common endorsements that modify coverage is placed within the policy itself and is triggered only when a specific endorsement number is entered on the declarations.

Related Article: MSO Businessowners Trigger Endorsements

COMPARISONS

The MSO Businessowners Policy is similar to the Insurance Services Office (ISO) and American Association of Insurance Services (AAIS) Businessowners Policies. However, it is not identical. One very significant difference is that the MSO Businessowners Policy clearly displays limits and coverages. It does this by displaying all limits on the declarations or declarations supplement instead of throughout the various sections within the policy. MSO also places conditions, glossaries (definitions), and certain exclusions in a common section at the end of the policy.

In addition to basic construction differences, there are differences in coverages.

ELIGIBILITY

Eligible risks include small to medium-sized apartment risks, condominium properties and offices, non-manufacturing businesses, and a limited number of mercantile and processing risks. There are over 100 eligible classifications. However, various insurance companies may file their own deviations to the eligibility criteria and offer a number of options.

Related Article: MSO Businessowners Program Eligibility

POLICY MAKE UP

The MSO Businessowners Policy consists of three basic forms:

Businessowners Declarations

Related Article: MSO Businessowners Policy Declarations

Businessowners Declarations Supplement

Related Article: MSO Businessowners Policy Declarations

BU 04 01–Businessowners Policy

Related Article: MSO Businessowners Policies Analysis

MSO BUSINESSOWNERS POLICY

The MSO Businessowners Policy uses a homeowners policy approach to package insurance coverages for small businesses. By selecting an amount of insurance on building and/or business personal property, the insured automatically receives a broad range of additional coverages with a single indivisible package premium.

Two different policies are available:

BU 04 01-Businessowners Policy covers on either a Basic Plus Coverage basis or an Expanded Coverage basis. Basic Plus Coverage provides “all risk” type coverage for building(s) and broad named perils for business personal property. The Expanded Coverage provides “all risk” type coverage for both building and business personal property. The coverage selected is based on entries on the declarations.
BU 04 02–Businessowners Policy–Named Perils covers both building(s) and business personal property on a named perils basis.

BU 04 01 is compared to BU 04 02 at the end of the Businessowners Policies Analysis.

Related Article: MSO Businessowners Policies Analysis

POLICY FORMAT

The Businessowners Policy has three major parts:

Part I–Property

Main Property Coverages
Supplemental Coverages
Losses Insured
Property Exclusions/Limitations
Losses Not Insured
Optional Coverage
Special Part I Conditions

Part II–Liability

Main Liability Coverages
Supplemental Coverages
Liability Not Insured
Special Liability Conditions

Parts I and II–Common

Common Exclusions
Common Glossary
Common Conditions

ENDORSEMENTS

Businessowners Policy endorsements tailor and customize the coverage provided to respond to specific situations. Its broad appeal led to introducing many other endorsements that cover specific exposures and situations. Endorsements that restrict or limit coverage so that the policy works with other coverage forms and policies to properly cover specific exposures are also available. Using the correct endorsement is like tailoring a suit. Doing so ensures that the coverage fits the insured.