Commercial PropertyQuestion 109 of 215
A pressurized industrial boiler ruptures inside a manufacturing plant, damaging the boiler itself and surrounding equipment. The plant carries a standard commercial property policy with the Special causes-of-loss form. Which statement is MOST accurate?
a.The Special form automatically covers the rupture as a windstorm loss
b.Coinsurance will increase the payment by 25% under the Agreed Value clause
c.The Civil Authority extension will respond to the boiler damage
d.Loss from steam boiler or pressure vessel rupture is typically excluded and requires a separate Equipment Breakdown (Boiler and Machinery) policy or endorsement
Explanation
Standard commercial property forms exclude loss caused by the explosion of steam boilers, steam pipes, steam engines, or steam turbines owned, leased, or operated by the insured. To insure these exposures (and the broader category of mechanical and electrical breakdown), the insured needs a separate Equipment Breakdown / Boiler and Machinery coverage form or endorsement.
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