Special Form Coverage
An open-perils property coverage form that insures against all risks of direct physical loss unless specifically excluded.
What It Is
Special Form Coverage, also known as open perils or all-risk coverage, is a property insurance coverage form (ISO CP 10 30) that insures against all risks of direct physical loss to covered property unless the cause of loss is specifically excluded in the policy. This is the broadest standard property coverage form available.
Unlike Basic Form (CP 10 10) or Broad Form (CP 10 20) coverage, which list the specific perils that are covered (named perils), Special Form coverage reverses the burden — everything is covered unless it is excluded. Common exclusions include earthquake, flood, ordinance or law, earth movement, and governmental action.
Special Form is the standard recommendation for most commercial property accounts because it provides the broadest protection and shifts the burden of proof to the carrier to demonstrate an exclusion applies.
Why It Matters for Brokers
Brokers should default to recommending Special Form coverage for commercial property because it provides the most comprehensive protection. Named perils forms (Basic and Broad) leave clients exposed to unusual causes of loss that may not be listed. Understanding the distinction between Special Form and named perils forms is essential for brokers when reviewing policies, explaining coverage to clients, and ensuring that property coverage meets contractual requirements (many leases and loan agreements specify 'all-risk' or 'special form' coverage).
Real-World Example
A commercial building insured on Special Form coverage suffers damage when a delivery truck's hydraulic lift fails and sprays hydraulic fluid across the building's exterior, damaging the facade and HVAC intake system. Under named perils coverage, this unusual cause of loss might not be listed. Under Special Form, the loss is covered because the carrier cannot point to a specific exclusion that applies. The $85,000 claim is paid in full.
Common Mistakes
- 1Accepting Basic or Broad Form coverage without informing the client of the significantly narrower protection compared to Special Form.
- 2Assuming Special Form covers flood and earthquake when these are standard exclusions that require separate policies or endorsements.
- 3Not verifying that contractual requirements specifying 'all-risk coverage' are satisfied by the Special Form — some contracts may require additional coverages beyond what Special Form provides.
How brokerageaudit.com Handles This
Policy Checker identifies the coverage form on every commercial property policy and alerts brokers when a policy uses Basic or Broad Form instead of Special Form, enabling informed client conversations about coverage adequacy.