Causes of Loss Form (Basic / Broad / Special)

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.