COMMERCIAL PROPERTIES PROGRAM. This Manual Contains Final Rates

Transcription

1 COMMERCIAL PROPERTIES PROGRAM This Manual Contains Final Rates February 2008

2 Commercial Simplified Fire Field Definitions Class Use AAIS Codes Leave off Trailing zero Forms CP-1 (01/01) Table of Contents FP CP-23 (01/01) Optional Property Coverage CP-80 (01/01) Fire Perils Part CP-82 (01/01) Basic Perils Part CP-100 (01/01) Commercial Property Coverage Conditions CP-124 (01/01) Contributing Insurance CP-132 (01/01) Loss Payable Options CP-605 (01/01) Outdoor Signs CP-606 (01/01) Antenna Coverage CP-612 (01/01) Explosion Limitation for Grain Risks CP-613 (01/01) Explosion limitation for Public Utility Gas Risks CP-614 (01/01) Protective Devices FP CL-101 (01/01) Common Policy Conditions FP CP-12 (01/01) Building and Personal Property Coverage Part FP CP-14 (01/01) Builders Risk Coverage Part FP CP-21 (01/01) Condominium Unit Coverage Part Form 1 No Fire Alarm Systems 2 Fire Alarm Systems Attach CP-614 if form 2 is designated Indicate Fire Alarm System Rate ID Rate Group Sprinklered Area - Square Feet Spray Painting 1 Specific <15,000 N/A 2 Class Unsurcharged <15,000 N/A 3 Class Surcharged <15,000 N/A 4 Yes <15,000 No 5 Yes <15,000 Yes 6 No >15,000 <=25,000 Yes 7 No >15,000 <=25,000 No 8 No >25,000 Yes 9 No 25,000 No 0 No <15,000 Yes Rule Rule 16.3 Rule Building & Contents Building & Contents Building & Contents (1) Large Area (2) Construction (3) Classification Application Question # Rate Group 4 & 5 Attach Form CP-614 1) Construction (2) Classification Application Question # Constant Application Question #

3 Commercial Simplified Fire Field Definitions Construction 1 Frame 2 Joisted Masonry 3 Non-Combustible 4 Masonry Non-Combustible 5 Modified Fire Resistive 6 Fire Resistive 7 Heavy Timber Joisted Masonry 8 Superior Non-Combustible Space or 0 Specific Item Symbol Position 1 I Inland B Beach S Seacoast Position 2 1 Numeric Multiplier Position 3 0 Numeric Multiplier Position 4&5 A,B,AB EC Symbol Protection Class Protected 09 Semi-Protected 10 Unprotected Deductible 04 $ $ $1, $2, $5, $10, $25, $50, $75,000 VM&M N Want Coverage Y Exclude Coverage Item See Rate Pages 18 20

4 ISO to AAIS Commercial Code Conversion ISO Class AAIS Class ISO Description Boarding and Lodging Houses, Rooming Houses, Fraternities and Sororities, Dormitories - Up to 10 Units Boarding and Lodging Houses, Rooming Houses, Fraternities and Sororities, Dormitories Units Boarding and Lodging Houses, Rooming Houses, Fraternities and Sororities, Dormitories - Over 30 Units Convents, Monasteries and Rectories, Orphan Homes, Nurses' Homes, Sisters' Homes - Up to 10 Units Convents, Monasteries and Rectories, Orphan Homes, Nurses' Homes, Sisters' Homes Units Convents, Monasteries and Rectories, Orphan Homes, Nurses' Homes, Sisters' Homes - Over 30 Units Apartments without Mercantile Occupancies - Up to 10 Units Apartments without Mercantile Occupancies Units Apartments without Mercantile Occupancies - Over 30 Units Apartments with Mercantile Occupancies - Up to 10 Units Apartments with Mercantile Occupancies Units Apartments with Mercantile Occupancies - Over 30 Units Condominiums without Mercantile Occupancies - Up to 10 Units Condominiums without Mercantile Occupancies - Over 30 Units Condominiums with Mercantile Occupancies - Up to 10 Units Condominiums with Mercantile Occupancies Units Condominiums with Mercantile Occupancies - Over 30 Units Mercantile - Sole Occupancy Only - Not Otherwise Classified -Low Susceptibility Mercantile - Sole Occupancy Only - Tire, Battery and AccessoryDealers without Tire Recapping and Vulcanizing Mercantile - Sole Occupancy Only - Wearing Apparel, Textiles,Shoes Mercantile - Sole Occupancy Only - Alcoholic Beverages other than Bars Mercantile - Sole Occupancy Only - Food Products, Retail Bakeries, Beverages other than Alcoholic Mercantile - Sole Occupancy Only - Baking on Premises, No Delivery to Outlets Mercantile - Sole Occupancy Only - Bars and Taverns Mercantile - Sole Occupancy Only - Motor Vehicles, No Repair Mercantile - Sole Occupancy Only - Boat and Marine Supply Dealers Mercantile - Sole Occupancy Only - Drugs Mercantile - Sole Occupancy Only - Electrical Goods, Hardwareand Machinery Mercantile - Sole Occupancy Only - Furniture and Home Furnishings other than Appliances Mercantile - Sole Occupancy Only - Jewelry Mercantile - Sole Occupancy Only - Sporting Goods Mercantile - Sole Occupancy Only - Not Otherwise Classified - Moderate Susceptibility Mercantile - Sole Occupancy Only - Not Otherwise Classified -High Susceptibility Greenhouses - Sole Occupancy Only Mercantile - Multiple Occupancy without 0564 Occupant Mercantile - Multiple Occupancy with 0564 Occupant Government Offices Banks and Offices other than Governmental Motels and Hotels without Cooking - Up to 10 Units Motels and Hotels without Cooking Units Motels and Hotels without Cooking - Over 30 Units Golf, Tennis and Similar Sport Facilities without Cooking Clubs, Not Otherwise Classified, Including Fraternal and UnionHalls Motion Picture Studios

5 ISO to AAIS Commercial Code Conversion ISO Class AAIS Class Theaters Excluding Drive-ins Drive-in Theaters Skating Rinks - Roller Rinks Bowling Alleys without Cooking Halls and Auditoriums Recreational Facilities, Not Otherwise Classified Boys' and Girls' Camps Dance Halls, Ballrooms and Discotheques Hospitals Nursing and Convalescent Homes Churches and Synagogues Dry Cleaners and Dyeing Plants, other than Self-Service Laundries, other than Self-Service Self-Service Laundries and Dry Cleaners Light Hazard Service Occupancies Service Occupancies, other than Light Hazard Funeral Homes Auto Parking Garages, Car Washes Gasoline Service Stations Motor Vehicle and Aircraft Repair, with or without Sales Tire Recapping and Vulcanizing, with or without Sales Aircraft Hangars without Repair Penal Institutions Museums, Libraries, Art Galleries (Non-Profit) Schools, Academic ISO Description Fire Departments, Police, Sewage, Water Works and Other Public Buildings Builders' Risk Freight Terminals General Storage Warehouses - Bailee Miscellaneous Products Storage - (Other Than Retail Or Wholesale Or Cold Storage) Household Goods Storage Cold Storage Warehouses Waste and Reclaimed Materials Including Yards Building Supply Yards, Including Retail Lumberyards, Coal andcoke Yards Mill Yards Oil Distributing, Oil Terminals and LPG Tank Farms - IncludingStock Oil Distributing, Oil Terminals and LPG Tank Farms - ExcludingStock Baking on Premises, Delivery to Outlets Beverage Bottlers Excluding Alcoholic Beverages Distilleries and Wineries Textile Mill Products Leather and Leather Products Printing

6 CLASS CODE VMM CODE CONTENTS CODE CONSTRUCTION TERRITORY COINSURANCE WIND ZONE WIND CODE PROTECTION BASE RATE VANDALISM SURCHARGE PROTECTION CONST COINS ADDITIVE MULTI- PLICATIVE SUBTOTAL CONDITION CHARGE FINAL RATE BLDG. FIRE - * * + * = + = BLDG. E.C. + * 1.00 * + * = + = CONTENTS FIRE - * * + * = + = CONTENTSE.C. + * 1.00 * + * = + = POLICY # ADDITIVE FIRE DEDUCTIBLE MULTIPLICATIVE FIRE DEDUCTIBLE FINAL RATE LIMIT BLDG FIRE * = PREMIUM BLDG E.C. * = ADDITIVE E.C. MULTIPLICATIVE E.C. DEDUCTIBLE CONTENTS * = FIRE CONTENTS E.C. * =

7 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL 1.1 Eligible Risks Ineligible Risks...1 Rule 2. Definitions Construction Protection Location...2 Rule 3. Policywriting Instructions Policy Format Declarations Page Policy Term Changes Cancellation Contributing Insurance Manual Revisions Loss Payable Options...4 Rule 4. Coinsurance Property Coverage...5 Rule 5. Deductibles Minimum Deductible Rate Modification Occurrence Deductible...5 Rule 7. Property Coverage Parts Building and Personal Property Building Property Business Personal Property Builders' Risks Completed Value Reconstruction or Renovation Condominium Buildings Building Property Business Personal Property Condominium Units Business Personal Property...10 Rule 8. Coverage Options...10 Rev 1.0 Table of Contents January 2003 Page -1-

8 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL 8.6 Antennas Signs Trees, Shrubs and Plants...11 Rule 9. Time Element Coverage Parts Earnings Coverage...12 Rule 12. Perils Parts CP-80 and CP Perils Rating Information...13 Rule 13. Perils Options Excluding Covered Perils...14 Rule 16. Other Premium Modifications Protective Devices Sprinklered Properties Cooking Modifications Automatic Fire Extinguishing System Exhaust System (Absence of) Large Area Modifications...16 Rule 17. Risk Classification Classification Section Class Description and Class Code Susceptibility Code Vandalism Multiple Occupancy Risk Classification Buildings Contents...19 Rule 18. Premium Determination Minimum Premiums Mid-Term Changes Retroactive Effective Dates Mid-Term Effective Dates Additional or Return Premiums Waiver of Premiums Basic Rating Information Mixed Construction Calculation of Premium...20 Rev 1.0 Table of Contents January 2003 Page -2-

9

10 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Eligibility Eligibility for coverage under the Commercial Properties Program is limited to risks that can be rated on a class basis. Class rating involves the use of rating information developed for groups of risks that have similar features, such as occupancy, construction, protection, and size. 1.1 Eligible Risks Habitational, mercantile, non-manufacturing, and warehousing properties (Class Codes ) are eligible for coverage under this program. Habitational occupancies include: apartment houses dormitories nursing homes apartment mercantile fraternity houses orphanages boarding houses lodging houses rooming houses convents monasteries sorority houses Habitational properties can include private garages for the occupants. Special rules may apply to specific properties/exposures. Refer to Rule Ineligible Risks Manufacturers and processors (Class Codes ), farm operations, and dwellings (Class Code 09900) are not eligible. Rule 2. DEFINITIONS 2.1 Construction The following construction definitions apply to all perils other than Earthquake: Frame -- Buildings where the exterior walls are wood or other combustible materials, including construction where combustible materials are combined with other materials such as brick veneer, stone veneer, wood iron-clad, and stucco on wood. Masonry Joisted -- Buildings where the exterior walls are constructed of masonry materials such as adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials, and where the floors and roof are combustible (disregarding floors resting directly on the ground). Non-combustible -- Buildings where the exterior walls and the floors and roof are constructed of, and supported by, metal, asbestos, gypsum, or other noncombustible materials. Masonry Non-combustible -- Buildings where the exterior walls are constructed of masonry materials, as described in Masonry Joisted above, with the floors and roof of metal or other non-combustible materials. Modified Fire Resistive -- Buildings where the exterior walls and the floors and roof are constructed of masonry or fire resistive material with a fire resistance rating of one or more, but less than two hours. Fire Resistive -- Buildings where the exterior walls and the floors and roof are constructed of masonry or fire resistive materials having a fire resistance rating of not less than two hours. Rev 1.0 Rules - 1 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

11 2.2 Protection VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Fire protection recognizes fire departments, water supply, and communications. Class rates are calculated recognizing the following protection classifications: Protected -- Building is located within 1,000 feet of a fire hydrant and is within five road miles of a responding fire department. Partially Protected -- Building is located more than 1,000 feet away from a fire hydrant, but is within five road miles of a responding fire department. Unprotected -- Buildings located in areas that are classified as neither protected nor partially protected. 2.3 Location The word "location" as used herein means all interests in real and personal property consisting of and contained in a single building or consisting of and contained in contiguous buildings (Contiguous means abutting, touching, actual contact). 2.4 Reserved for Future Use Rule 3. POLICYWRITING INSTRUCTIONS 3.1 Policy Format A commercial property policy must be written as a monoline policy. The following are components of the monoline format: Monoline Declarations Page and any Supplementary Declarations Pages Table of Contents, CP-1 Common Policy Conditions, FP CL-101 Commercial Property Coverage Conditions, FP CP-100 One or more Coverage Parts: Building and Personal Property Coverage Part, FP CP-12 Builders' Risk Coverage Part, FP CP-14 Condominium Buildings Coverage Part, FP CP-19 Condominium Unit Coverage Part, FP CP-21 Earnings Coverage Part, CP-60 One or more Perils Parts: Fire Perils Part, CP-80 Basic Perils Part, CP-82 Endorsements: Optional Property Coverage, CP-23 Contributing Insurance, CP-124 Loss Payable Options, CP-132 Perils Exclusion, CP-145 Rev 1.0 Rules - 2 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

12

13 3.4 Changes VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Coverage can be provided at both the old and new locations for ten days when transferring coverage. Coverage at the old and new locations apply in the proportion that the value at each location bears to the value of all covered property being moved. Other changes can also be made after the policy is written. 3.5 Cancellation Policies cancelled by either the insured or the company must be cancelled in accordance with the cancellation provisions in the Common Policy Conditions, CL-101, or any applicable amendatory endorsements. Compute the return premiums on a pro rata basis. When calculating the return premium, round to the next higher whole dollar. Unless canceling a policy as of the inception date, retain the minimum premium. 3.6 Reserved for Future Use 3.7 Reserved for Future Use 3.8 Reserved for Future Use 3.9 Contributing Insurance Coverage can be provided on a percentage basis by more than one company. Show the limit of insurance on the declarations for each coverage written by the company. This option is only available when the Association provides the maximum limits it is permitted to offer. Attach Contributing Insurance, CP-124. Show the company's percentage of the total of all contributing insurance in the appropriate place on the CP-124. Use the schedule on the CP-124 to show the total dollar amount of all contributing insurance for each coverage provided on a contributing insurance basis Manual Revisions Revisions to the Commercial Properties rating information, rules, and forms do not apply to policies in force before the effective date of the revision Loss Payable Options The standard mortgage provisions are included in the Property Coverage Parts. Other loss payable options can be used in those instances where the standard mortgage provisions are not applicable. The following options can be used when another party has a financial interest in the property of an insured and requires that it be included as a loss payee under the insurance covering the property. Loss Payable -- This option requires the insurer to pay claims jointly to the insured and the loss payee as their interests may appear. This option does not offer the loss payee any protection if the policy is made void by actions of the insured, nor does it require that advance notice of cancellation or non-renewal be given to the loss payee. Attach Loss Payable Options, CP-132, and indicate which option applies. Rev 1.0 Rules - 4 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

14 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL 3.12 Reserved for Future Use 3.13 Reserved for Future Use 3.14 Reserved for Future Use Rule 4. COINSURANCE Coinsurance provisions, including examples, are included in the Property Coverage Parts. 4.1 Property Coverage The rating information in this manual contemplates 80% coinsurance unless otherwise specified. Options for 90%, 100%, and less than 80% coinsurance are available. Factors are shown in the following table. 4.2 Reserved for Future Use Coinsurance Factor 80% % %.90 Rule 5. DEDUCTIBLES The basic deductible provision is included in the Property Coverage Parts. The rating information shown in this manual contemplates a $500 deductible in any one occurrence, unless otherwise specified. The deductible amount must be shown on the declarations. 5.1 Minimum Deductible The minimum deductible will be based on the combined limit of building and contents for a location. The minimum deductible is shown below. Under $250,001 $500 $250,001 - $500,000 $1,000 over $500,000 $2, Rate Modification Multiply the rates contemplating a mandatory deductible of not more than $500 by the factors shown in the table. Do not apply the factors to the rates for any form contemplating a mandatory deductible equal to or exceeding the amount of the deductible desired under this Plan. When the mandatory deductible amount exceeds $500, increase the deductible factor from the tables by one half the differences between 1.00 and the factor. 5.2 Reserved for Future Use 5.3 Occurrence Deductible Deductibles greater than $500 are only available for property written at 80% or higher coinsurance or equivalent insurance to value. The following per occurrence deductibles are available for Property Coverage Parts: Rev 1.0 Rules - 5 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

15 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL $2,500 $10,000 $50,000 $1,000 $5,000 $25,000 $75,000 Other deductible amounts are not available. Deductibles can vary for each location. If the deductible varies by location, and loss results at more than one location caused by the same occurrence, the largest deductible applies. RATING PROCEDURE Multiply the rates and charges for the covered property by the deductible factors shown below. Credits are shown by "Fire" and "Other" perils. Rev 1.0 Rules - 6 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

16 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL TOTAL AMOUNT OF DEDUCTIBLE CREDIT INSURANCE AT FATORS EACH LOCATION DEDUCTIBLE FIRE OTHER More Than $250,001 $1, , , , , ,000 Or Less More Than $500,001 $2, , , , , ,000 Or Less ,001-1,000,000 $5, , , ,000 Or Less ,001-1,000,000 $10, , , ,000 Or Less ,001-1,000,000 $25, ,000 Or Less ,000,000 Or Less $50, ,000,000 Or Less $75, Reserved for Future Use 5.5 Reserved for Future Use Rule 6. RESERVED FOR FUTURE USE Rule 7. PROPERTY COVERAGE PARTS 7.1 Building and Personal Property Use form CP-12, Building and Personal Property Coverage Part, to cover Building Property and/or Business Personal Property. Coverage for each type of property applies only if a limit is shown on the declarations. Refer to the form for a complete description of coverage Building Property When a limit is shown on declarations for Building Property, coverage for described buildings and structures includes: completed additions; fixtures, machinery, and equipment that are a permanent part of the described building or structure; outdoor fixtures; Rev 1.0 Rules - 7 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

17 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL personal property owned by the insured that is used to maintain or service the described building or structure; and if not covered by other insurance: additions under construction, including alterations and repairs; and materials, equipment, supplies, and temporary structures, on or within 100 feet of the described premises, that are used in constructing additions or used for making alterations or repairs. If applicable, include the value of the property listed above in determining the Building Property limit. Use the rating information for buildings shown in this manual Business Personal Property When a limit is shown on the declarations for Business Personal Property, coverage for business personal property in or adjacent to a building or structure described on the declarations includes: the insured's interest in the personal property of others to the extent of the insured's labor, material, or services; the insured's interest as a tenant in improvements to the described building or structure; and leased property which the insured has a contractual responsibility to insure. If applicable, include the value of the property listed above in determining the Business Personal Property limit. Use the rating information for contents shown in this manual. Coverage for tenant's improvements can be included with all other covered business personal property as indicated above, or can be written separately. When writing coverage separately, show a separate limit on the declarations and use the rating information for buildings shown in this manual Builders' Risks Reserved for Future Use Use form CP-14, Builders' Risk Coverage Part -- Completed Value. Refer to the form for a complete description of coverage. Completed Value When Builders' Risk coverage is provided on a completed value basis, the amount of insurance must be written at 100% of the completed value for full recovery in the event of loss. Coverage must be provided from the start of construction. Use the rating information for building Class Code 23000, Builders' Risk shown in this manual Reserved for Future Use Reconstruction or Renovation Building additions, reconstruction, renovations, or subcontractors' interest can be included with building values under the Building and Personal Property Coverage Part, form CP-12, or insured separately under a Builders' Risk Coverage Part or form CP-14. Use the rating information for reconstruction and renovation in this manual. Rev 1.0 Rules - 8 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

18 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL 7.3 Condominium Buildings Use form CP-19, Condominium Building Coverage Part, to provide coverage for condominium building property and/or business personal property. Coverage for each type of property applies only if a limit is shown on the declarations. Refer to the form for a complete description of coverage Building Property When a limit is shown on declarations for Building Property, coverage for described buildings and structures includes: completed additions; fixtures, machinery, and equipment that are a permanent part of described buildings and structures; outdoor fixtures; personal property owned by the insured that is used to maintain or service the described buildings or structures; and if not covered by other insurance: additions under construction, including alterations and repairs; and materials, equipment, supplies, and temporary structures on or within 100 feet of the described premises that are used in constructing additions or used for making alterations or repairs. If required by the Condominium Association Agreement, the limit shown on the declarations for a described building or structure also includes the following types of property contained within each condominium unit: fixtures, improvements, and alterations that are a part of a described building or structure; and refrigerators, stoves, ovens, dishwashers, clothes washers and dryers, security devices, and other housekeeping appliances. If applicable, include the value of the property listed above in determining the Condominium Building Property limit. Use the rating information for buildings shown in this manual Business Personal Property When a limit is shown on the declarations for Business Personal Property, coverage for business personal property in or adjacent to a building or structure described on the declarations includes: the insured's interest in the personal property of others to the extent of the insured's labor, material, or services; personal property owned by the insured or owned indivisibly by all unit-owners; and leased property which the insured has a contractual responsibility to insure. If applicable, include the value of the property listed above in determining the Business Personal Property limit. Use the rating information for contents shown in this manual. Rev 1.0 Rules - 9 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

19 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Reserved for Future Use 7.4 Condominium Units Use form CP-21, Condominium Unit Coverage Part, to provide coverage for individual condominium unit-owner's business personal property, including fixtures, improvements, betterments, and/or alterations. When a coinsurance percentage of 80% or more is shown on the declarations and personal property is covered, limited coverage for owned condominium units is also included under the Building and Personal Property Coverage Part, form CP Business Personal Property When a limit is shown on the declarations for Business Personal Property, coverage for business personal property in or adjacent to a building or structure described on the declarations includes: fixtures, improvements, and alterations included with or added to the condominium unit and owned by the insured; the insured's interest in the personal property of others to the extent of the insured's labor, material, or services; and leased property which the insured has a contractual responsibility to insure. If applicable, include the value of the property listed above in determining the Business Personal Property limit. Use the rating information for contents shown in this manual. Reserved for Future Use Reserved for Future Use Rule 8. COVERAGE OPTIONS 8.1 Reserved for Future Use 8.2 Reserved for Future Use 8.3 Reserved for Future Use 8.4 Reserved for Future Use 8.5 Reserved for Future Use 8.6 Antennas When a coinsurance percentage of 80% or more is shown on the declarations, limited coverage for outdoor radio, television, satellite, dish-type, or other antennas and their masts, towers, and lead-in wiring is provided under the Building and Personal Property Coverage Part, form CP-12; the Condominium Building Coverage Part, form CP-19; and the Condominium Unit Coverage Part, form CP-21. Separate coverage can be provided by individually scheduling each antenna with a specific limit. Attach Antenna Coverage, CP-606. Show the description of property, coinsurance, Perils Part, and limit on the schedule. Use the rating information in the Special Classes rate pages of this manual to determine the additional premium. Rev 1.0 Rules - 10 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

20 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL 8.7 Reserved for Future Use 8.8 Reserved for Future Use 8.9 Reserved for Future Use 8.10 Reserved for Future Use 8.11 Reserved for Future Use 8.12 Reserved for Future Use 8.13 Reserved for Future Use 8.14 Reserved for Future Use 8.15 Reserved for Future Use 8.16 Reserved for Future Use 8.17 Reserved for Future Use 8.18 Reserved for Future Use 8.19 Reserved for Future Use 8.20 Reserved for Future Use 8.21 Signs When a coinsurance percentage of 80% or more is shown on the declarations, limited coverage for outdoor signs is provided under the Building and Personal Property Coverage Part, form CP-12; the Condominium Building Coverage Part, form CP-19; and the Condominium Unit Coverage Part. When a higher limit is needed, separate coverage can be provided by scheduling each sign with a specific limit. Attach Outdoor Signs, CP-605. Show the description of property, coinsurance, Perils Part, and limit on the schedule as indicated Reserved for Future Use 8.23 Reserved for Future Use 8.24 Reserved for Future Use 8.25 Reserved for Future Use 8.26 Trees, Shrubs and Plants When a coinsurance percentage of 80% or more is shown on the declarations, limited coverage for outdoor trees, shrubs, and plants not held for sale is provided under the Building and Personal Property Coverage Part, CP-12; the Condominium Building Coverage Part, CP-19; and the Condominium Unit Coverage Part, CP-21. Separate coverage can be provided per location. However, trees, shrubs, and plants grown for commercial purposes or for standing timber are ineligible. Attach Trees, Shrubs, and Plants Coverage, CP-610. Assign separate limits per each tree, each shrub, and each plant and an aggregate limit per occurrence for all items per location. Show the limits and the Perils Part on the schedule. Rev 1.0 Rules - 11 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

21 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL When coverage for the vehicle peril applies, damage to trees, shrubs, and plants caused by vehicles can be excluded by indicating so on the schedule with an "X." Use the rating information in the Special Class section of this manual to determine the additional premium Reserved for Future Use Rule 9. TIME ELEMENT COVERAGE PARTS Time element coverage is available for mercantile or non-manufacturing risks. Mercantile or non-manufacturing risks are risks where the business consists principally of the sale or storage of merchandise or furnishing a service. Manufacturing risks are risks where the business consists principally of changing raw stock to finished stock by aging, assembling, converting, seasoning, or other processes. 9.1 Reserved For Future Use 9.2 Earnings Coverage Use Earnings Coverage Part, form CP-60, to provide coverage for loss of earnings (including rents). Refer to Earnings Coverage Part, form CP-60, for a complete description of coverage. Only one option is available. It is: Option 1 Not Available; Option 2 Not Available Option 3 Rents only. Coverage is provided for the option when shown by a limit on the declarations. When Option 3 is selected, earnings means only rents. A separate limit must apply to each building or location. Use the fire and extended coverage rating information for buildings multiplied by the Earnings Coverage factors shown below for the applicable occupancy. Earnings Coverage factors are shown by payment option: Monthly Limitation. Payment options must be shown on the declarations. Rev 1.0 Rules - 12 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

22 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Monthly Mercantile Limitation or Non-Mfg Manufacturing Rental 1/3 not eligible not eligible /4 not eligible not eligible /6 not eligible not eligible /12 not eligible not eligible Reserved for Future Use Rule 10. RESERVED FOR FUTURE USE Rule 11. RESERVED FOR FUTURE USE Rule 12. PERILS PARTS One or more of the following Perils Parts must be attached to each policy: CP-80 Fire CP-82 Basic When more than one type of property is described on the declarations, identical Perils Parts must be selected for the various items described. Make an entry on the declarations page to indicate which Perils Part applies CP-80 and CP-82 Perils Parts CP-80 and CP-82 provide coverage for loss caused by the perils listed below. Perils Part Used: CP-80 CP-82 Fire Basic Perils Covered: Fire or Lightning X X Explosion X X Vandalism Sonic Boom Windstorm or Hail Smoke Vehicles and Aircraft Riot or Civil Commotion Sprinkler Leakage Sinkhole Collapse Volcanic Action X X X X X X X X X 12.2 Reserved for Future Use 12.3 Reserved for Future Use 12.4 Perils Rating Information The rating information in this manual for CP-80 and CP-82is shown under the following headings: FIRE, VANDALISM and EXTENDED COVERAGE. A brief explanation of each category is provided below. Detailed rating procedures are provided by Rule 18, Premium Determination. Rev 1.0 Rules - 13 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

23 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Fire -- The FIRE rating information applies to coverage for the perils of Fire or Lightning, Explosion, and Vandalism. Use the FIRE rating information in determining the premium for CP-80 and CP-82. When Perils Part CP-80 is used, subtract the Vandalism credit shown in this manual from the FIRE rating information. Vandalism -- Use the VANDALISM rating information in determining the premium for CP-82, when a Vandalism Rate Group other than "1" applies. The Vandalism Rate Group assignments are shown in the Classifications Section of this manual. More information about the Classifications Section is provided by Rule 17. Extended Coverage -- The EXTENDED COVERAGE rating information applies to coverage for the following perils: Sonic Boom Smoke Sinkhole Collapse Windstorm or Hail Vehicles Volcanic Action Sprinkler Leakage Aircraft Riot or Civil Commotion Use the EXTENDED COVERAGE rating information in determining the premium for CP-82. Rule 13. PERILS OPTIONS 13.1 Excluding Covered Perils Perils otherwise covered can be excluded from the Perils Parts. Attach Perils Exclusion, CP-145, and identify perils to be excluded. Rule 14. RESERVED FOR FUTURE USE Rule 15. RESERVED FOR FUTURE USE Rule 16. OTHER PREMIUM MODIFICATIONS 16.1 Protective Devices The installation and maintenance of certain protective devices may be required. Protective devices include: fire alarm systems sprinkler systems Reserved for Future Use Sprinklered Properties Multiply the building and contents fire rates by the factors for this rule shown below, to reflect the existence of a standard automatic sprinkler system. Class Codes: ,20100,20200, ,21300, 21400,21500,21910,21920,22100,22700,22800 Rev 1.0 Rules - 14 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

24 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Construction Frame or Mod. FR Masonry Non- Masonry & Fire Joisted Combust. Non-Comb. Resistive All Other Classes Large area modifications (Rule 16.3) are not applicable to sprinklered areas. The cooking modifications (Rule 16.2) in sprinklered areas should include a credit for automatic extinguishing systems. Attach Protective Devices, CP-614, when the insured controls the sprinkler system. Identify the protective device on the declarations or on the schedule of the CP Cooking Modifications The building and contents fire rates must be adjusted to recognize restaurant occupancies or commercial cooking facilities on the premises that are open to the general public. In some instances, Restaurant Class Code must be used for rating purposes in lieu of the otherwise applicable Class Code. Multiply the building and contents fire rates by the cooking modification factors shown below. When "(Rest.)" is shown with the applicable cooking modification, multiply the building and contents fire rates for Restaurant Class Code by the cooking modification factors. Rev 1.0 Rules - 15 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

25 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Class Codes: ,20100,20200, ,21300, 21400,21500,21910,21920,22700,22800 Construction Rest. Frame or Mod. FR Area Masonry Non- Masonry & Fire (%) Joisted Combust. Non-Comb. Resistive Under * * 1.00* 0.80* 1.35 over * 1.00* 1.00* 1.00* Rest. code11700 See Code and modifications below any Mercantile Mult-Occ. Code any See Code and modifications below All Other Classes any * Restaurant Additional rate adjustments may also be required to recognize fire extinguishing systems and the absence of safely arranged exhaust systems, as well as other deficiencies or hazards. Apply all required factors in succession Automatic Fire Extinguishing System Multiply the building and contents fire rates by.85 for an approved automatic fire extinguishing system covering cooking equipment and exhaust systems. Attach Protective Devices, CP-614, when the insured controls the sprinkler system. Identify the protective device on the declarations or on the schedule of the CP Exhaust System (Absence of) Multiply the building and contents fire rates by 1.15 for the absence of a needed exhaust system Reserved for Future Use Reserved for Future Use 16.3 Large Area Modifications The building and contents fire rates must be adjusted when the floor area exceeds 15,000 square feet. The chargeable areas do not include: apartment and other habitational areas; basement areas that are vacant or are used for building maintenance; office areas, except where offices are the principal occupancy; Rev 1.0 Rules - 16 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

26 VIRGINIA PROPERTY INSURANCE ASSOCIATION greenhouse areas; or sprinklered areas. COMMERCIAL PROPERTIES MANUAL The area modifications are not applicable to apartments and other habitational risks rated on a unit basis, or Builders' Risks. The area modifications should be based upon the predominant occupancy and construction. Multiply the building and contents fire rates by the Large Area Modification factors for this rule shown below. Class Codes: 11800,20100,20200,21300,21400,21500,21910, 21920,22100,22700,22800 Construction Frame or Mod. FR Area Masonry Non- Masonry & Fire (1000 sq.ft.) Joisted Combust. Non-Comb. Resistive 15 to over Mercantile Codes: , , to over All Other Classes 15 to over Reserved for Future Use Rule 17. RISK CLASSIFICATION For rating purposes, a class code assignment and various other rate group assignments must be made for each risk covered by the Commercial Properties Program. The classification codes are also used for statistical reporting Classification Section Use the Classification Section of this manual to determine the class codes and other rate group assignments that are needed to rate each risk. When an asterisk is shown in place of a class code or rate group assignment, a more specific classification should be used. Detailed rating procedures are provided by Rule 18, Premium Determination Class Description and Class Code The class code reflects the occupancy of the covered building or the occupancy of the premises in which covered personal property is located. A class description and class code assignment is provided for each type of property that is eligible for coverage under the Commercial Properties Program. Rev 1.0 Rules - 17 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

27 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Susceptibility Code The susceptibility code (SUSC) shown in the Classifications Section for each class represents the contents susceptibility of that class to loss caused by the perils of Fire or Lightning and Explosion. The susceptibility codes are used in determining the FIRE premium for personal property in multiple occupancy buildings. There are three different susceptibility codes: A = Low Susceptibility B = High Susceptibility C = Average Susceptibility Reserved for Future Use Reserved for Future Use Reserved for Future Use Vandalism The vandalism (VMM) rate group assignment shown in the Classification Section for each class represents the building and contents susceptibility of that class to loss caused by the peril of Vandalism. Vandalism rate group assignments are used in determining the building and personal property premiums for Perils Parts CP-82 when the vandalism rate group assigned to the applicable class is "2" or higher Multiple Occupancy Risk Classification Buildings When a building contains more than one type of occupancy, use the Classification Section to determine the class code for each occupancy and calculate each occupancy's floor area as a percentage of the building's total floor area. Use the following guidelines to determine the building class code. Rev 1.0 Rules - 18 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

28 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL a. When occupancies share equal areas, use the class code with the highest FIRE rating information. b. When the building contains only multiple mercantile occupancies, regardless of area, use the appropriate Building Mercantile Multiple Occupancy class code ( ). c. When occupancies are 100% habitational, use the predominant Habitational class code for the total number of habitational units. d. When occupancies are 75% or more habitational and the remaining occupancies are Offices (20100 or 20200), Light Hazard Service (21910), or Funeral Homes (21920), use the predominant Habitational class code for the total number of habitational units. e. When occupancies are 75% or more habitational and the remaining occupancies are other than Offices (20100 or 20200), Light Hazard Service (21910), or Funeral Homes (21920), use the appropriate Apartment Mercantile class code (01340, 01350, or 01360). f. When occupancies are 75% or more Offices and the remaining occupancies are other eligible occupancies, use the predominant Office class code (20100 or 20200). g. For all others, disregard any habitational or office occupancies and use the class code for the remaining occupancy with the highest percentage of floor area Contents When a building contains more than one type of occupancy, use the following steps to select the contents class code for the covered personal property. Step 1 Use the Classification Section to determine the class code and the susceptibility code for the contents of the covered occupancy. The class code for the covered occupancy is used for statistical reporting. Step 2 Use the procedures described under Rule to determine the class code for the building in which the contents are located. Step 3 Use the contents rating information for the building class code determined in Step 2 in determining the personal property premium for the contents of a multiple occupancy building. When the contents rating information for the building class code determined in Step 2 is shown for susceptibility codes A, B, and C, use the rating information for the susceptibility code determined in Step 1. Rule 18. PREMIUM DETERMINATION Refer to the company if the rating information shown in this manual has not been converted from loss costs to company rates and premiums Minimum Premiums All policies are subject to a $500 annual minimum premium per location Mid-Term Changes Retroactive Effective Dates Use the rates and rules in effect on the policy inception date when making coverage changes that become effective as of policy inception. Rev 1.0 Rules - 19 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

29 VIRGINIA PROPERTY INSURANCE ASSOCIATION COMMERCIAL PROPERTIES MANUAL Mid-Term Effective Dates Use the rates and rules in effect on the policy inception date when coverage changes become effective after the policy inception or anniversary date. Additional or Return Premiums Prorate additional or return premiums. Retain any minimum premiums that apply. Waiver of Premiums Small additional and return premiums amounting to $15 or less that occur as the result of a mid-term coverage change may be waived. For return premiums, the insured must be notified in writing that a return premium is available; and the return premium must be refunded if requested by the insured Basic Rating Information The rating information shown in this manual applies annually for every $100 of insurance. Unless otherwise stated, the rating information reflects 80% coinsurance and a $500 deductible amount Reserved for Future Use 18.5 Reserved for Future Use 18.6 Reserved for Future Use 18.7 Mixed Construction When rating buildings (or contents in buildings) of mixed construction, use the construction that represents over 50% of the construction of the building. If no construction represents over 50% of the construction of the building, use the highest rated construction Calculation of Premium A separate premium must be determined for each item described on the declarations. Use the rating procedures described in this rule to determine the property and time element premiums for items subject to Perils Parts CP-80 and CP-82. Obtain the following information for each item described on the declarations: Class Code and Rate Group Assignments; Protection, Construction, and Territory-- Also determine if the building or structure has open sides or if personal property is located in building or structure with open sides; or property is located in the open. Rev 1.0 Rules - 20 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission

30 VIRGINIA PROPERTY INSURANCE ASSOCIATION Applicable Coverage Part; Applicable Perils Part; Limit of Insurance; Coinsurance Percentage; Vacancy Exposure; COMMERCIAL PROPERTIES MANUAL Commercial Cooking Exposure; and Applicable Deductible Options, Perils Options, Coverage Options, and Premium Modifications Fire - CP-80 and CP-82 Building, Personal Property and Time Element Coverage A Fire premium applies to all items covered by Perils Parts CP-80 or CP-82. Step 1 Select the base FIRE rate for the applicable class code and territory. Use the Special Class rating information for Property in the Open. Refer to Rule 16.2, Cooking Modifications to determine the class code used for rating purposes when the commercial cooking exposure is present. Step 2 For Perils Part CP-80: Subtract the VANDALISM surcharge from the FIRE rate selected in Step 1. For Perils Part CP-82: If the Vandalism rate group is "2" or higher, add the VANDALISM surcharge to the FIRE rate selected in Step 1. When the commercial cooking exposure is present, use the Vandalism rate group assignment for the original class code, whether or not the restaurant code was used to determine the base FIRE rate. Step 3 Multiply the result of Step 2 by the Protection/Construction factor and round to three decimal places. Use the building Protection/Construction factor for Time Element. Step 4 For Coverage Parts CP-12, CP-14, CP-19 and CP-21: Multiply the result of Step 3 by the applicable coinsurance factor when the coinsurance percentage is waived or when it does not equal 80%. Round to three decimal places. Step 5 Add the result of Step 4 to any other applicable FIRE rating information shown in this manual as an "additive" rate increase. Step 6 Multiply the result of Step 5 by any other applicable FIRE rating information shown in this manual as a factor. Round to three decimal places after all factors have been applied. Step 7 Multiply the result of Step 6 by the amount of insurance in hundreds and round to the nearest whole dollar amount. The result of this step is the Fire premium Extended Coverage - CP-82 - Building, Personal Property and Time Element Coverage Building and Personal Property Coverages In addition to the Fire premium described above, an Extended Coverage premium applies to all items covered by Perils Part CP-82. Rev 1.0 Rules - 21 January 2003 Includes copyrighted material from American Insurance Services, Inc., with its permission