Article
Understanding Scheduled and Blanket Property Coverage
No MCIT member plans to lose property in a burglary, fire or other disaster. When such an unfortunate event occurs, MCIT reviews the property schedules to verify coverage and to begin the claim process.
Picture the reaction of a member and MCIT when a loss cannot be paid due to an oversight in scheduling property. Therefore, it is important for members to understand how to keep property schedules current without unnecessary reporting of new acquisitions and how coverage applies if a loss occurs.
Items have either scheduled property coverage or blanket property coverage.
Scheduled Coverage
Scheduled property coverage means that an item must be listed on the member’s property schedule for it to be covered. Below are examples of items that must be individually scheduled for coverage to apply.
Buildings
Owned or leased buildings must be scheduled at replacement cost value for coverage to apply. If a member wants to have coverage for tax-forfeited or vacant structures, they must schedule the structures but reflect their actual cash value.
Property in the Open
Among the items that typically comprise property in the open are bleachers, playground equipment, statues and monuments, picnic tables, fences, parking lot and yard lighting, self-standing signs and television/radio towers. The scheduled limit for a property in the open item should reflect its replacement cost.
Contractors Equipment
A member’s contractors equipment schedule should include items that are mobile but not road licensed. Property usually found on a contractors equipment schedule includes tractors, mowers, snow blowers, dozers, graders, loaders, backhoes. The limit shown for an item should reflect its current actual cash value.
Miscellaneous Personal Property
Members should schedule items as miscellaneous personal property that are not appropriately addressed by the coverages for contents, EDP equipment or contractors equipment. As with contractors equipment, the limit for each item should reflect its actual cash value.
Property often found on miscellaneous personal property schedules includes snowmobiles, boats, all-terrain vehicles and unattached items in mobile equipment units and road-licensed vehicles (defibrillators and other medical emergency/EMT equipment; helmets and miscellaneous tactical equipment; body armor; firearms; tools; survey equipment, including total stations; testing equipment; hand-held radios, etc.).
Coverage limits provide for changing values. The most MCIT will pay for a loss of covered scheduled property is the lesser of the scheduled value (replacement cost or actual cash value) of the items sustaining loss or 125 percent of the coverage limit shown in the member’s coverage schedules for the property suffering the loss.
Recommendations: Scheduled Property
- Members should report to MCIT immediately all newly acquired buildings, property in the open, contractors equipment and miscellaneous personal property.
- Members should ensure that everything that should be on the schedule is on the schedule and listed at its appropriate value (actual cash value or replacement cost).
Blanket Coverage
Blanket property coverage means that a single coverage limit applies to all covered items. Each individual item is not assigned a separate limit of coverage. Depending on how the coverage is written, up to the entire blanket limit can be used to repair or replace the item(s) with one of like kind and quality on either a replacement cost basis (without deduction for depreciation) or on an actual cash value basis (with a depreciation deduction).
Below are examples of property covered on a blanket basis.
Contents of a Building
The contents coverage limit shown in a member’s property coverage schedule for a building that has covered contents is a blanket limit that applies to that building only.
Contents coverage includes items kept in buildings or temporarily outside but within 500 feet of the scheduled location. Some examples include office furniture, supplies and equipment. The contents limit should exclude the value of electronic data processing (EDP) equipment if separate EDP coverage has been purchased.
Coverage limits provide for changing values. The most MCIT will pay for a loss of covered contents is the lesser of the replacement cost of the items sustaining loss or 125 percent of the contents coverage limit shown in the member’s property coverage schedule for the building where the loss occurred.
Recommendations: Contents
- Keep an inventory of all contents at each location.
- Video documentation of the inventory helps ensure items are not missed.
- Review and adjust, as appropriate, contents coverage limits to reflect current values.
Remember, the MCIT Coverage Document provides members up to an additional 25 percent of the scheduled limit at the time of loss to help ensure coverage for contents purchases that occur as part of normal day-to-day operations.
Electronic Data Processing Coverage
Electronic data processing coverage is written on a blanket basis. To maintain the blanket limit, MCIT must receive an itemized inventory of all covered computer items and their related components to confirm the accuracy of the blanket limit each year. MCIT usually requests updated inventories in April.
EDP equipment is defined as an arrangement of interrelated machine components that can accept and manipulate data into a desired format or result. It includes personal computers, printers, copiers, laptops, digital cameras, telephone systems, ARMER/800 megahertz equipment, 911 systems and the like. It does not include software or data.
The coverage limit available is the listed replacement cost on the EDP inventory.
Recommendations: EDP
- Members should adjust as necessary their total blanket limit when a major purchase or the discontinued use of a major item exceeds the EDP coverage limit shown in the member’s property coverage schedule.
- Members should advise MCIT to adjust the total blanket limit and include an updated inventory when the above occurs.
- ARMER/800 megahertz equipment on towers, base equipment and the cabling between components are best covered by listing them on the EDP inventory.
- Remember to include installation costs in the listed replacement costs on the EDP inventory.
Risk Management Consultants Provide Advice
MCIT risk management consultants work with members to help with coverage, liability and risk management concerns. Members are encouraged to call them with their questions and to schedule a meeting.
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