ISO's New Businessowners Program Insures more Businesses with New, Enhanced Coverages

NEW YORK, March 26, 1996 — Using Insurance Services Office, Inc.'s (ISO) new businessowners insurance program, insurers will be able to underwrite more kinds of businesses and provide new and enhanced coverages.

The program — just filed in most states for regulatory approval — will help insurers be more competitive in selling package policies that provide both property and liability protection for small businesses.

ISO's new program reflects improvements suggested by insurers, agents and other groups in the property/casualty insurance business. The new ISO businessowners program is proposed for a January 1 implementation date.

A key feature of the program is that it makes more businesses eligible for the program. The new program may be used to insure businesses sited in building space as large as 25,000 square feet with gross sales of as much as $3 million. Eligibility limits under the old program are a maximum of 15,000 square feet and $2 million in gross sales.

The new program also adds several classes to the long list of businesses eligible to buy the convenient and comprehensive coverage, including contractors, fast-food and limited-cooking restaurants up to 7,500 square feet in area, convenience stores with gasoline sales that do not contribute more than half of the stores' sales revenues and dry cleaners that clean on premises.

Under the new program, premiums for contractors and fast-food restaurants will be calculated by considering the property and liability parts of the policy separately. The liability portion of the premium will be based on payroll for contractors and sales for restaurants. The property part will be based on the value of the property. Premium for all other classes will continue to be based on property and liability coverages combined.

The new businessowners program includes a host of coverage enhancements to ensure the program meets marketplace demands, including:

  • Full exterior glass coverage;
  • An increase from $10,000 to $100,000 per premises for contents such as stock inventory or machinery for 30 days after new premises are acquired or construction on the premises has begun;
  • New $5,000 limits each for loss of accounts receivable due to destruction of documentation, and for valuable papers and records; and
  • New $5,000 limits for increased construction costs to bring reconstruction of a damaged structure into compliance with current building ordinances, with options to increase the limits.

The program offers several new optional coverages, including increased limits for specific kinds of losses. Among the options are:

  • An increased liability limit of $2 million;
  • Elimination of the $100,000 limit on electronic data processing coverage;
  • Professional liability coverage for several classes of policyholders; and
  • Coverage for loss caused by utility-service equipment failure.

The standard deductible for the businessowners policy will increase from $250 to $500. But the program provides an option to purchase the lower deductible or to save on premium by taking a higher deductible.

ISO is a nonprofit corporation that provides information about property/casualty insurance, including statistical information, actuarial analyses, policy language and related services to U.S. property/casualty insurers.

Release: Immediate

Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com