Question

Atlanta Processing Company (APC) has building coverage and coverage for your business personal property under a building and personal property coverage form (BPP) subject to a causes of loss-broad form. A tornado damaged the building and its contents. The policy limits are adequate to meet coinsurance requirements and to pay for the damage to APC's building and personal property. Indicate whether APC's BPP would cover each of the following losses. If the loss is covered, explain any limitations that may apply.

a. The cost to remove debris of covered property

b. The cost for required pollution cleanup of chemicals stored in the

basement of APC's building that seeped (due to the damage from the tornado) into the ground outside the building foundation

Answer 1

a). The cost to remove debris of covered property comes under additional coverage in BPP so if APC has opted for that additional coverage then it will be covered subject to the following limitations:

1. Debris is caused by or results from a Covered Cause of Loss occurring during the policy period and the said loss is reported in writing within 180 days of the damage/loss.
2. It will not apply to removal of debris from property which is owned by/leased to the landlord of the building where APC is located unless they have a contractual obligation to insure such a property and the BPP covers it
3. Not remove property that is not covered under BPP
4. Not remove mud/earth from the grounds of said premises
5. Not extract pollutants from land/water
6. Not remove/restore polluted land/water
7. The most that can be paid for the total of direct physical loss/damage and debris removal expense is the insurance limit applied to the covered property. Subject to this condition, the debris removal expense is limited to 25% of the sum of the deductible plus the amount paid for direct physical loss/damage to the covered property.

b). Pollutant cleanup and removal is also, an additional coverage in BPP so if APC has opted for it then they will get insurance for it. Since the pollutant results from a Covered Cause of Loss, the additional coverage will cover it. However, this is a limited coverage. The expenses have to be reported within 180 days after the loss has occured. There is a $10,000 limit per location for all such expenses occurring during each separate 12-month period of the policy.