What it does
The Standard Property Policy is a stand-alone policy, not a building-block form. It combines building and personal property coverage, a limited set of named causes of loss, and its own conditions in one document. Insurers use it for property that does not qualify for the regular coverage part, especially buildings that are vacant, unoccupied, distressed or of a hazardous class.
Key provisions
- Insures building, business personal property and personal property of others when limits are shown.
- Covered causes of loss are named. Fire, lightning and explosion always apply. Windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, sinkhole collapse and volcanic action apply only when shown in the Declarations, and vandalism and sprinkler leakage are separate options.
- Vacancy and unoccupancy provisions are central to this policy. Vacancy Changes (CP 04 60) and Loss Payable Provisions (CP 12 18) both list this policy among the forms they modify.
- Several CP endorsements have separate versions for this policy, such as Builders Risk Changes (CP 11 99) and the Condominium Changes forms (CP 17 98 and CP 17 99).
Who needs it
Owners and lenders who need basic coverage on a building that standard markets decline. Typical cases are an empty building awaiting sale or redevelopment, a foreclosed property, or a building with poor maintenance.
Quoting and selling notes
- Explain the narrower perils and vacancy limitations to the insured and any mortgagee. Add CP 12 18 for lenders.
- Get the building's current condition, security, utilities status and plans for occupancy or renovation.
