Causes of Loss Form (Basic / Broad / Special)
Also known as: Causes of Loss Forms, CP 10 10 / CP 10 20 / CP 10 30, Basic Broad Special form, Special Form (open perils)
A Causes of Loss Form is the piece of an ISO commercial property policy that answers the single most important coverage question: which perils are actually covered? The coverage form (such as the Building and Personal Property Coverage Form) describes what property is insured and how it is valued, but the separate Causes of Loss Form describes how that property can be damaged and still trigger a payout. There are three standard versions. Basic (CP 10 10) covers a short list of named perils — fire, lightning, explosion, windstorm/hail, smoke, aircraft/vehicles, riot, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Broad (CP 10 20) adds perils like falling objects, weight of snow/ice/sleet, water damage from plumbing, and certain collapse. Special (CP 10 30) is the broadest and most commonly purchased: it covers all direct physical loss unless the cause is specifically excluded or limited.
This choice matters enormously to a small-business buyer because it silently controls the burden of proof at claim time. Under Basic and Broad (named perils), you must prove your loss was caused by a listed peril before the insurer pays. Under Special (open perils), the burden flips — the loss is covered unless the insurer can point to a specific exclusion such as wear and tear, flood, earthquake, or faulty workmanship. That difference is the essence of open perils vs named perils, and it is why lenders and sophisticated buyers almost always insist on the Special form for their commercial property. Special typically costs more in premium but closes gaps you would never think to name in advance — like a forklift puncturing a wall or a mysterious water intrusion.
A practical nuance: "Special form" is not the same as "all risk with no conditions." Even the Special form contains standard exclusions (flood, earth movement, ordinance or law, mold, and gradual deterioration), and some covered perils carry inner sublimits — theft, for example, is covered under Special but may be capped. It is also a genuine ISO form identified by its CP number, so a certificate or quote referencing "CP 10 30" tells you open-perils coverage is in force. Because valuation is set elsewhere on the declarations page, always confirm the Causes of Loss Form and whether losses settle at replacement cost or actual cash value — the two together determine what you actually collect.
Real-world scenario
Sunrise Hardware & Supply, a 6,200-square-foot independent hardware store in Waco, Texas, insures its building and stock under a commercial property policy. When the agent quoted the account, she compared the three ISO Causes of Loss forms. Basic Form (CP 10 10) covered a short named list — fire, lightning, windstorm, hail, explosion, smoke, and vandalism among them; Broad Form (CP 10 20) added falling objects, weight of ice and snow, and accidental water discharge; Special Form (CP 10 30) covered risks of direct physical loss unless specifically excluded (open perils). Basic Form quoted at $3,200 a year, Broad Form at $3,900, and Special Form at $4,850 — an extra $1,650 over Basic that the owner chose to pay for the broader trigger.
The store carried a $900,000 building limit against an $850,000 replacement-cost value, $350,000 on business personal property, and a $5,000 deductible, all written on a replacement cost basis with an 80% coinsurance clause (the $900,000 limit easily cleared the $680,000 the clause required). Fourteen months later, a store employee backed the shop's own box truck through the storefront while loading a delivery, causing $142,000 in structural damage and destroying $38,000 of shelved inventory.
Here the choice of form mattered. Basic and Broad forms both include an 'aircraft or vehicles' peril, but that peril specifically excludes damage from a vehicle the insured owns or operates in its own business — so on either of those forms the claim would have been denied. Special Form carries no such exclusion, so the loss was covered as a risk of direct physical loss. After a single $5,000 per-occurrence deductible, the insurer paid $137,000 to rebuild the storefront and the full $38,000 to replace inventory at replacement cost — $175,000 in total. Had the owner bought Basic Form to save $1,650 a year, the entire $180,000 loss would have come out of pocket.
How it affects your premium
The gap between Basic, Broad, and Special Form pricing is driven by how much peril the insurer takes on. Key cost drivers include:
- Form breadth (Basic vs. Broad vs. Special): Special Form's open-perils trigger costs the most because the carrier insures everything not specifically excluded, while Basic Form limits payouts to a short named list.
- Construction and occupancy: A frame restaurant rates far higher than a masonry office; combustible construction and cooking or woodworking exposures push Special Form premiums up sharply.
- Valuation basis: Choosing replacement cost over actual cash value raises premium because the insurer pays to rebuild new without depreciation.
- Deductible level: Moving from a $1,000 to a $10,000 deductible can cut the property premium 10-25%.
- Coinsurance percentage and insured limits: Higher building and contents limits and an 80-100% coinsurance clause increase the exposure base and the premium.
- Added coverages and endorsements: Bolting on business income, spoilage, or theft protection each layers additional cost onto the base form.
- Location and CAT exposure: Wind/hail, flood, and crime scores by ZIP code materially affect what any of the three forms cost.
Common misconceptions
Myth: Special Form covers absolutely everything, so I never have to read the exclusions.
Reality:
Special Form is open-perils, but it still carries a long exclusion list — flood, earthquake, wear and tear, mold, and ordinance/law are typically excluded and must be added back by endorsement or a separate policy.
Myth: Basic and Special Form pay the same amount on a covered claim; only the price is different.
Reality:
The form determines whether a loss is covered at all, not the payout math. A cause of loss like theft or accidental spillage may be fully covered under Special yet flatly denied under Basic and Broad, which never list those perils.
Myth: The Causes of Loss form controls how much I get paid.
Reality:
The form sets the covered perils; your limits, coinsurance compliance, and valuation basis (replacement cost vs. actual cash value) determine the actual dollar payout.
Frequently asked questions
What is the difference between Basic, Broad, and Special Causes of Loss forms?
Basic covers a short named list (fire, lightning, wind, hail, vandalism, etc.), Broad adds perils like falling objects, weight of snow and ice, and accidental water discharge, and Special covers all risks of direct physical loss except those specifically excluded (open perils).
Is Special Form worth the extra premium?
For most retail, office, and habitational risks yes — Special Form's open-perils trigger catches unusual losses (theft, accidental spills, an owned vehicle striking the building) that Basic and Broad simply do not list, and the premium difference is often only a few hundred to a couple thousand dollars a year.
Does Special Form cover flood and earthquake?
No. Flood and earthquake are standard exclusions on all three forms and require separate policies or endorsements; Special Form's open-perils language does not override those exclusions.
Which Causes of Loss form comes with a BOP?
Most Business Owners Policies build in Special (open-perils) property coverage by default, which is one reason a packaged BOP is often more cost-effective than a standalone commercial property policy on Basic Form.
Can I insure my building on Special and my contents on Basic?
Yes — the Causes of Loss form is selected per coverage part, so it is common to write the building on Special and inventory on Broad or Basic, though most agents recommend matching forms to avoid coverage gaps.
Sources cited
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