1. Forms
2. FP
3. FP-05-30

What the form is

The FP 05 30 endorsement is designed for farm property insurance policies. Its primary function is to provide a limited amount of coverage for property damage caused by fungi (including mold), wet rot, dry rot, and bacteria. This coverage is an exception to broader exclusions for these types of perils that are often found in standard farm property forms. The endorsement also explicitly excludes loss or damage caused by viruses or bacteria, unless it falls within the limited fungi, wet rot, dry rot, and bacteria coverage provided by this endorsement.

Classes of business it applies to

This endorsement is specifically used for farm and agricultural businesses. Examples include:

• Crop farms
• Livestock operations (though the endorsement specifies it does not apply to livestock loss)
• Dairy farms
• Other agricultural enterprises with insured buildings and property susceptible to mold, rot, or bacteria.

For instance, a farm building used for storing feed could suffer a covered loss if a leaking roof (a covered peril) leads to mold growth damaging the structure, subject to the endorsement's limits and conditions.

Special considerations

There are several important considerations when using this form:

• Limited Coverage: The coverage provided is typically subject to an aggregate limit per annual policy period (e.g., $15,000, which may be increased up to $25,000 with additional premium). This limit is a sub-limit of the overall property coverage.
• Named Peril Trigger: The loss or damage from fungi, wet rot, dry rot, or bacteria must be the result of a peril named in the form or a specified cause of loss covered by the policy.
• Time Sensitivity for Leaks/Seepage: If the loss arises from leaks or seepage, the damage often needs to have occurred within a relatively short period (e.g., a couple of weeks) of the originating moisture condition for coverage to apply.
• Exclusion of Virus/Bacteria: While providing limited coverage for some bacteria-related losses (as part of fungi, wet/dry rot), the form maintains a broader exclusion for loss due to viruses or bacteria.
• Alternative to Absolute Exclusion: This endorsement is used as an alternative to forms like FP 01 60, which provide an absolute exclusion for virus or bacteria and do not offer the limited fungi/rot buy-back.
• Not for Livestock: The coverage provided by this endorsement does not apply to loss of livestock.

Key information for agents and underwriters

For Agents:

• Clearly explain the limited nature of this coverage to the insured, including the aggregate limit and the specific conditions under which a loss would be covered.
• Discuss the importance of prompt reporting of any water intrusion to mitigate potential mold or rot damage, especially given the time limitations for seepage-related losses.
• Ensure the insured understands that this is not comprehensive mold coverage but a limited buy-back for specific situations.

For Underwriters:

• Assess the farm's overall exposure to moisture, mold, and rot. Consider factors like the age and condition of buildings, climate, and storage practices.
• The presence of this endorsement indicates a willingness to provide some level of coverage for an otherwise excluded peril; pricing should reflect this increased exposure, even if limited.
• Be aware of the aggregate limit and any requests to increase it, evaluating the additional risk accordingly.
• Understand that this endorsement modifies other farm property forms like FP 10 60 (Causes of Loss Form – Farm Property), FP 00 30 (Mobile Agricultural Machinery and Equipment Coverage Form), or FP 00 40 (Livestock Coverage Form).