REEL RISK FRIDAYS #14 · THE COVERAGE CUT
The zombies hit the mall doors hard enough to buckle the frames and shatter the glass. When the owner calls to report the damage, what goes in the box marked “cause of loss”?
George A. Romero’s Dawn of the Dead (1978) gives us the mall siege. In our fictional claim, the horde damages one wing as it forces its way inside. Survivors cause additional damage while barricading the mall. After authorities regain control, the building official orders the entire mall demolished under the building code, including the wing that was untouched.
Would the Special Form cover damage caused by zombies?
Yes, on the facts we’ve stipulated, the direct physical damage the horde causes to insured property can be covered under the ISO Causes of Loss – Special Form. The mall owner can show what physically happened: the horde forced its way through the entrance, breaking the glass and buckling the frames. Under CP 10 30, the question is whether the policy excludes or limits that physical loss. We don’t need to find “zombies” on a list or decide whether the horde intended to damage the doors.
The Building and Personal Property Coverage Form still matters. It tells us what qualifies as insured property. The owner’s entrance doors and the inventory inside a tenant’s store may belong on different claims. The damage the survivors caused needs its own account, too. An adjuster would separate a door broken in the breach from a wall altered to install a barricade, then apply the policy to each item.
Change the form and ask the question again
Basic Form (CP 10 10). Now we need to identify a named peril. Vandalism is one possibility, but it requires willful and malicious damage. Consider the difference between someone deliberately smashing a storefront and a crowd pressing against it until the glass gives way. The glass looks the same afterward. The evidence about what the crowd was doing may lead to a different coverage decision. Riot or civil commotion is another possible path. The fact that a crowd was present leaves open whether the event qualifies under the applicable law.
Broad Form (CP 10 20). Broad still uses named perils. The benchmark edition adds falling objects, the weight of snow, ice or sleet, and defined water damage, along with limited collapse coverage. None of those additions accounts for the doors and storefronts damaged in this siege. The vandalism and riot questions still matter.
Special Form (CP 10 30). Start with direct physical damage to covered property and check the exclusions, limitations and endorsements. The horde’s physical impact is a viable covered cause even if we can’t prove vandalism or riot. That’s the difference the Causes of Loss form makes on this claim.
The mall has a second claim problem
Imagine the contractor gives you one estimate to tear down the entire mall. Ask for the estimate to be broken out. The wing the horde damaged, the value of the undamaged wing, and the cost to demolish and clear that undamaged wing are separate items. The original physical damage happened during the siege. The additional loss follows from enforcement of the building code.
The Special Form’s Ordinance or Law exclusion addresses the code-required teardown and debris removal. The Governmental Action exclusion also deserves a look when a public authority orders destruction. The fire-spread exception has no role on the facts we stipulated. Debris from covered siege damage should be evaluated separately under the building form’s Debris Removal additional coverage.
Replacement cost governs how the policy values covered damage. The benchmark building form also offers limited additional insurance for qualifying code upgrades to damaged parts. For a building with its own limit, that allowance is capped at the lesser of $10,000 or 5% of the building limit, subject to the form’s conditions. The undamaged wing’s demolition falls outside that allowance.
What would the Ordinance or Law endorsement change?
If selected for the mall, ISO CP 04 05 Coverage A can address the loss in value of the undamaged portion within the building limit. Coverage B can address the bill to demolish and clear that portion. Coverage C can address qualifying additional construction costs required by code. Check the schedule and get the actual demolition order. The reason the code was triggered matters, especially if covered and uncovered damage both contributed.
At renewal, give your client the contractor’s estimate in pieces. Ask which part of the policy would pay for the damaged wing, the value of the undamaged wing, the demolition bill, and the code upgrades. Then open the forms and work through the answers together.
The claim file compares all three Causes of Loss forms, maps the damage and demolition costs to the policy, and shows what an adjuster would need to document.
